25 Cheapest Countries in the World

Usman Kabir
11 min read

In This Article:

In this article, we talk about the 25 cheapest countries in the world. To skip our in-depth analysis of how inflation affects the cost of living, go directly and see 5 Cheapest Countries in the World.

The UK just experienced double-digit inflation for the first time in forty years. Similarly, the consumer price index (CPI), a key indicator of US inflation, rose by over three times between 2020 and 2021, from 1.4% to 7.0%, after spending more than two decades below 3%. Despite a slight moderation in inflation to 6.0% in February, individual household budgets are under pressure, consumer confidence is suffering, and the cost of living is increasing.

Many consumers are putting financial limitations in place as a result of the growing cost of living. 47% of British consumers have already reduced or plan to reduce their overall spending as a result of inflation, according to data analytics company Kantar. 56% of American consumers, according to data by the information firm Morning Consult, are ready to shop less overall. Consumers are placing a higher value on staples over discretionary goods. The Procter & Gamble Company (NYSE:PG), PepsiCo, Inc. (NASDAQ:PEP), and The Coca-Cola Company (NYSE:KO) are some of the top consumer staples stocks during the current inflationary environment. These companies have consistent pricing power and offer consumers goods that are required regardless of the state of the economy. This is good for the investors, but not so much for the consumers.

The continuous supply chain crisis and the conflict in Russia and Ukraine are major contributors to the current high level of inflation, which is pushing up the cost of food, housing and energy prices. A typical household spends one-third of their income on housing. Housing costs have increased by 8%, roughly equal to the overall rate of inflation. Nonetheless, wages in the US climbed by 5.28% in December 2022 compared to the same month the year before. This suggests that the majority of people's largest expense is increasing faster than their income. Likewise, food costs increased by 9.9% in 2022. Almost 12% of household spending goes toward food, making it clear that this is an essential expense that is rising faster than salaries. The price of diesel fuel, which has increased significantly more than the price of gasoline, is a hidden factor in food inflation. Many of the equipment used to produce food and the trucks that transport them run on diesel. The additional expense is being passed on to consumers by the producers.

All consumers, even retirees, are directly impacted by inflation in terms of their income, savings, and spending. For many people, the main concern about retirement is the cost of living. It is not unexpected that more people are choosing to retire abroad to cheap countries with a low cost of living, affordable healthcare, better weather, low taxes and a higher quality of life. Living overseas is a significant retirement ambition for 12% of Americans, according to the Aegon Retirement Readiness Survey 2021. But, while choosing a cheap country to relocate to, safety is also quite important.

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