International Inflation Rates
2025-11-24
Global inflation has cooled from its post-pandemic peak, but for people moving to the world’s 50 most expensive countries and states – from Monaco, Hong Kong, Singapore and Switzerland to California, Hawaii, the Nordics, Australia, New Zealand and high-cost islands in the Caribbean and Pacific – the cost-of-living shock has essentially been locked in rather than reversed. Most of these locations now show low or moderate annual inflation, yet structurally high housing, imported goods, services and insurance costs keep everyday living far above global norms, while in a handful of more fragile markets (such as Sao Tome & Principe, Turkmenistan, Liberia and some African and island economies) higher and more volatile inflation further erodes local purchasing power. The result is that anyone relocating to these jurisdictions needs a substantial salary uplift simply to maintain their standard of living, particularly once rent, schooling and healthcare are factored in, and faces added currency risk when pay is set in a weaker “home” currency but expenses are in strong francs, dollars or Singapore dollars. For employers, this means headline inflation data are no longer enough: robust cost-of-living indices, housing benchmarks and explicit salary purchasing-power modelling are essential to design competitive packages, avoid painful real-income losses for mobile staff and sustain global mobility in what is now a structurally high-cost environment.
Inflation’s Long Tail
Inflation is no longer the global fire it was in 2022, but neither is it fully tamed. The International Monetary Fund reckons world inflation has fallen from nearly 7% in 2023 to around 4½% in 2025, with further but slower easing ahead. In the rich-country club of the OECD, headline inflation sits at about 4.2%, with core price pressures concentrated in services and housing. The acute shock has passed; the price level shock has not. For globally mobile workers, the bill for living in the world’s priciest jurisdictions is now a permanent feature, not a passing squall.
Most of the 50 most expensive countries and states sit in three familiar camps: financial enclaves, rich welfare states and tiny, trade-dependent islands. Cost-of-living rankings still place Hong Kong, Singapore and Swiss cities at or near the summit, thanks to eye-watering housing costs, strong currencies and premium-price services. In such places, today’s low inflation simply cements yesterday’s price surges.
Low Inflation, High Prices
Take the gilded microstates and offshore hubs. Monaco (2.2% inflation), Switzerland (0.1%), Liechtenstein (0.1%), Luxembourg (2.7%), Hong Kong (1.2%), Singapore (0.7%), the Cayman Islands (1.9%), Jersey, Guernsey and the Isle of Man (all roughly flat) are enjoying near-price stability. Yet they combine scarce urban land, strict planning, heavy reliance on imported labour and goods, and tax or regulatory regimes that attract high earners. Residential property, private schooling and everyday services already start from dizzying levels. For anyone moving in on a salary set in pounds, euros or dollars elsewhere, purchasing power is eroded less by current inflation than by the structurally high base and strong local currencies.
A second cluster comprises social-democratic Europe. Norway (3.1%), Denmark (2.1%), Iceland (4.3%), Finland (marginally negative), France (0.9%) and Austria (4.0%) sit in a euro-area environment where headline inflation has eased back towards 2% but services prices, especially rents and regulated utilities, remain sticky. High indirect taxes, climate levies and generous public services keep the cost of living elevated even as inflation slows. Salaries are typically higher and more compressed; for mid-career professionals, the trade-off is predictable but heavy taxation and steep everyday prices versus strong public goods.
The Anglosphere Squeeze
Then come the English-speaking hot-spots. In the United States, national inflation is about 3% year-on-year, with higher readings in dynamic coastal metros. Hawaii, California, Massachusetts, New York State, Washington, Oregon, Alaska and Rhode Island all share the same federal inflation backdrop, but exhibit chronic housing under-supply, high insurance and energy costs, and robust demand from tech, finance and tourism. New York City still ranks among the world’s most expensive urban areas. Moving there from a cheaper American state, let alone from an emerging economy, means that nominal salary uplifts must be substantial merely to hold real living standards constant.
Australia (3.2%) and New Zealand (3.0%) combine high food and housing prices with long supply chains. Israel (2.5%), Taiwan (1.5%) and South Korea (2.4%) add strong tech-driven wage growth and dense, pricey cities to the mix. For movers, salary purchasing power is squeezed most by rents and schooling; inflation is no longer surging, but mortgage and rental costs remain prohibitive relative to median incomes.
Islands of Imported Inflation
A large share of the top-50 are small island and Caribbean economies whose inflation prints belie residents’ complaints. The Bahamas (0.3%), Barbados (1.2%), Turks & Caicos, Antigua & Barbuda, St Kitts & Nevis, Grenada, St Vincent & Grenadines, Saint Lucia, Montserrat, the British and US Virgin Islands, Anguilla and Greenland all show near-zero or low single-digit inflation. Yet they import almost everything, often via the United States, and face oligopolistic retail, high freight costs and rising climate-related insurance premiums. Data for some, such as Turks & Caicos and Montserrat, are dated, but the structural story is clear: prices are high, choice is limited and any global spike in fuel or food transmits quickly and painfully.
Sao Tome & Principe (12.8%), Solomon Islands (5.5%), Turkmenistan (around 5.5%) and Liberia (4.3%) illustrate a more fragile pattern. Here, weaker institutions, currency volatility and dependence on commodity or aid inflows keep inflation more volatile and above rich-world norms. Gabon and Côte d’Ivoire show lower recent readings, but face similar exposure to swings in food and fuel. In such places local wages rarely keep pace; expatriates paid in hard currencies may enjoy strong purchasing power, but locals see real incomes eroded whenever the next shock hits.
From Numbers to Paycheques
Across these 50 economies, the common challenge is not rampant current inflation but the legacy of prior price surges layered on structural expensiveness. Global inflation may drift lower as growth slows and earlier monetary tightening bites. But for a family contemplating a move to Monaco, Hong Kong, Singapore, Zurich, California or Hawaii, the arithmetic of salary purchasing power remains unforgiving.
First, the cost of living level matters more than the inflation rate. A move from a mid-cost country with moderate inflation to a jurisdiction where housing, childcare and groceries are 50–100% more expensive requires a very large gross-salary uplift simply to stand still. Secondly, timing matters: in higher-inflation frontier markets like Sao Tome & Principe, Turkmenistan or Liberia, any delay in annual pay reviews can wipe out real gains within a year. Thirdly, currency risk looms large: workers paid in weakening home currencies but spending in strong Swiss francs, Singapore dollars or US dollars see purchasing power erode even if local inflation is tame.
For employers, the implication is clear. Mobility policies that rely on headline inflation alone are now inadequate. Proper cost-of-living indices, housing benchmarks and salary purchasing-power calculations are needed to size allowances, guard against unpleasant surprises and keep globally mobile staff willing to move. The age of double-digit inflation may be fading, but for those living in the world’s priciest jurisdictions, the cost-of-living shock has simply become the new normal.
Ultimately, the key for any mover is: nominal salary + inflation + cost base = real purchasing power. Ignore any one of those elements at your peril.