Protesters demand the resignation of Sri Lanka's president over the government's handling of the economic crisis, the start of which predates COVID. Photo: ISHARA S. KODIKARA/AFP via Getty Images
The impact of the COVID pandemic, Russia’s invasion of Ukraine and the continued climate crisis have combined to create huge inflationary pressures across the world. Hit by soaring prices for food and fuel, a quarter of a billion more people could crash into extreme levels of poverty this year.We asked our writers and editors to give an insight into how the global cost of living crisis is being felt across the world.
Australia has long had a prohibitively expensive housing market, but the window of opportunity continues to shrink, particular for first-time buyers and those from lower socioeconomic backgrounds. Low interest rates are slingshotting house prices to record highs – Sydney’s median house reached AU$1,601,467 by the end of 2021 – and a recent rental affordability report found that only 1.6 percent of private rentals are affordable for those on minimum wage. For many, the situation is desperate. Between May 2021 and May 2022 there was a 327 percent increase in the number of people using crowdfunding platforms like GoFundMe to fundraise money for housing costs, including requests for assistance paying rental arrears, as well as temporary and mobile accommodation alternatives in the face of homelessness. One in 200 Australians are classified as homeless, and one third of those are under the age of 18.Cost of living pressures are also soaring, with the Ukraine war driving inflation and Australia’s consumer price index hitting a 20-year high as costs for gasoline, home building, and food increase. A recent survey found that half of Australians considered the rising cost of living their biggest point of concern – more than healthcare, the economy, and housing.Gavin ButlerHong Kong
Compared to the rest of the world, inflation has been moderate in Hong Kong and is expected to stay broadly in check. But life in the city, which has been repeatedly crowned as the world’s most expensive place to live, remains challenging, particularly for low-income households.
In February, disruptions in supply from mainland China sent the prices of vegetables soaring, after cross-border truck drivers tested positive for coronavirus and were sent to quarantine. The next month, residents stripped supermarket shelves bare, amid rumours of a potential lockdown. Though Hong Kong has emerged from the deadliest wave of COVID-19, it is staring at a recession.Rachel CheungHungary
In Hungary, the economic stress created by Russia’s war in Ukraine has handed right-wing populist strongman Viktor Orbán a pretext to seize even more powers.The Hungarian Prime Minister, who won a fourth consecutive term in power in a crushing election victory last month, announced a state of emergency due to the war on Tuesday, giving his nationalist government the power to rule by decree and bypass parliamentary oversight.Orbán said that the “state of danger” – announced hours after parliament passed a constitutional amendment that enabled it – would allow his government to react swiftly to the crisis created by the war, and “protect Hungary and Hungarian families by all possible means.”“This war poses a constant threat to Hungary, puts our physical security at risk and also endangers the energy supply and financial security of the economy and families. We see that the war and the sanctions in Brussels have led to a huge economic upheaval and a drastic rise in prices,” he said in a video posted to his Facebook page.
“The world is on the verge of an economic crisis. Hungary must stay out of this war and protect the financial security of its families.”Hungarians have been facing soaring energy costs and rising inflation, which the National Bank of Hungary has said was running at 9.5 percent year-on-year last month, its highest level in nearly 22 years.Orbán, Russian President Vladimir Putin’s closest ally in the European Union, has refused to sign off on the bloc’s proposals to put an embargo on Russian oil, citing the severe cost to his economy of stopping imports of Russian fuel.Critics said that the “state of danger” declaration represented just the latest power grab from an authoritarian leader who has strategically dismantled democratic checks and balances during his time in power, remaking Hungary in line with his vision of an “illiberal democracy.”Emese Pásztor, director of the Hungarian Civil Liberties Union’s Political Freedoms Project, said that the latest constitutional change showed the government “once again adapting the rules of the game to its own needs.”Such changes threatened to “become the new normal, which will threaten the fundamental rights of all of us, and rule by decree will further diminish the importance of Parliament,” she wrote in a statement.
A new wave of protests has shaken dozens of Iranian cities in recent weeks after thousands took to streets across the country following a sharp rise in the prices of essential food items, triggered by government cuts in the subsidies on wheat and flour. Prices of everyday needs like cooking oil, chickens, eggs, and bread have jumped by 300 percent over the past month. President Ebrahim Raisi announced a set of new subsidy policies related to wheat and flour-based products last month, which he claimed would ease the knock-on effect of high inflation rates that have hit the world. But still, anti-riot police had to be deployed across several towns and cities to respond to angry protesters demanding better living standards. Unofficial sources documenting daily incidents have confirmed at least five people were killed during the clashes with security forces, and reported hundreds of arrests.The Iranian economy is fatigued with sanctions related to its nuclear programme, and has been slowed down further by the global pandemic. More than half of the population of 85 million lives below the poverty line. Government subsidies on fuel, electricity, and food have played a vital role in easing the burden on people. The last time the Iranian government cut subsidies on fuel, it sparked a bloody nationwide protest in 2019 that left around 3,000 people dead and 20,000 others arrested.
Despite the high risk of harsh treatment, fear of death and arrest by the security forces, people have still taken the streets in recent weeks.Mohammed RasoolLebanon
Lebanon’s currency, which has lost 90 percent of its value in the last three years, has fallen to an all time low this week on the black market, losing 54 percent more value just in the last two weeks, after the country held parliamentary elections. Lebanon’s economic crisis, which the world bank called one of the worst in over a century, has impacted everything from fuel prices to medicine and wheat shortages. Lebanese politicians are blaming the Russian invasion of Ukraine for the rise in fuel and wheat prices globally, which has severely affected the population, as only 20 litres of fuel amounts to one month of minimum wage. Three quarters of Lebanese are now living below the poverty line, and the economic crisis has meant that most people will be forced to enter summer with little to no electricity in their homes. State electricity is only provided across most cities for 2-3 hours a day, and people are forced to use generators as substitutes. But with the global fuel prices going up, the country is expected to plunge further into darkness as running a generator has become unaffordable. Basic things like keeping food from spoiling will become increasingly difficult and most of the restaurant industry will take a huge hit, as it did last summer when faced with similar challenges. To add to the growing inflation across the country, telecommunication prices are also set to increase in July, with phone bills going up by 5 times, and internet bills expected to triple. It is expected that there will be many people who will no longer be able to afford to connect to the internet across the country.
Pakistan has grappled with high inflation for months. The price of food has increased by 15 percent since last year, according to Pakistan’s Bureau of Statistics. This has had a devastating impact on families. In an average Pakistani household, more than 40 percent of household income is spent on food, unlike advanced economies such as the UK where it stands at 10 percent. According to the International Food Security Assessment of 2021-31, food insecurity in Pakistan is expected to reach 38 percent in the next decade. Currently, cash-strapped households are reeling from the combined effects of food insecurity, inflation and the rupee which has taken a steep decline to the US dollar. This has impacted fuel and wheat prices, which are largely imported, and led the government to ban a broad list of “luxury” imported items such as chocolate, cheese, but also items unavailable in Pakistan, such as tampons, just to keep its economy from crashing.Rimal FarrukhSomalia
In February, Somalia was suffering through its worst drought in 40 years when a war in Europe arrived to exacerbate the crisis. The arid East African country, which has endured four consecutive failed rainy seasons, imports almost all of its wheat from Russia and Ukraine. That arrangement has been severely strained since Russia invaded its neighbour, making an already severe food crisis in the Horn of Africa considerably worse.
Children in a camp for internally displaced people (IDP) in central Somalia told VICE World News in March that they were down to eating just one meal of plain rice a day. For months, the United Nations’ World Food Programme (WFP) has warned of a potential looming famine in the country unless the world pays closer attention to the crisis. “Thousands of households are pouring into [IDPs] from the areas hardest hit by the drought,” said Lara Fossi, WFP Deputy Country Director in Somalia. “They are desperately seeking assistance and when you visit some of these camps, you can see the lines of the new arrivals coming in and many of these people are women and children, and frankly, it's impossible to see them, and not be shocked by the visible signs of destitution and life-threatening malnutrition…The latest data shows how rapidly things are getting worse, with six million people now facing acute food insecurity in the coming months.”Dipo FaloyinUK
Inflation has caused a sharp cost-of-living crisis as household bills rise faster than wages across Britain and the cost of heating has been bumped up by 54 percent. The spike in costs for basic goods and services has put already struggling families in dire situations, with some rationing showers to once a week and eating cold food to save on soaring energy bills.Thousands across the country have protested, demanding the government impose a windfall tax on energy companies to help people who can't afford the massive increase in bills.The worst isn't over for Britons already struggling with money. The household energy price cap is likely to grow again to around £2,800 ($3,499), which is expected to send 12 million households into fuel poverty just as the need for heating starts to become most acute. There's no good news expected for inflation either, which the Bank of England warns could rise to 10 percent in the last three months of 2022.Helen Nianias