Economic data shows that South Africa’s consumer price index (CPI) and high rate of unemployment makes it one of the most miserable countries in the world.
This is based on the misery index, developed by late economist Arthur Okun, using data from the Economist’s Intelligence Unit, the IMF and compiled by the John Hopkins University.
The misery index score is based on the sum of a country’s unemployment rate, lending rate and inflation rate, minus the percentage change in real GDP per capita – in 2013.
Only countries where all four data points were available are included in the index, totaling 89 countries.
With an index score of 37.4, South Africa ranks as the 8th most miserable country measured, with the country’s unemployment rate being the largest contributing factor to the score.
South Africa’s unemployment rate rose to 25.2% of the labour force in the first quarter of 2014 from 24.1% in the fourth quarter of 2013.
In April, the country’s consumer price index (CPI) rose to 5.9% from a year earlier in February, with the South African Reserve Bank forecasting that consumer inflation will average 6.3% in 2014.
Further data released by BankServ Africa indicates that the South African economy has also slowed down “to a crawl”, having shown only 0.2% growth, year-on-year, to April 2014.
The only other African country to be listed as more miserable than South Africa (also due to high levels of unemployment), is Egypt, with an index score of 38.1.
Topping the list as the most miserable place in the world is Venezuela, with an index score of 79.4. Leading the country’s line of misery are extremely high consumer prices.
According to Steve Hanke, Professor of Applied Economics at the Johns Hopkins University in Baltimore, the index actually understates the level of misery in the country as it uses the official annual inflation rate of 56.2%.
“In fact, I estimate that Venezuela’s annual implied inflation rate at the end of last year was 278%. That rate is almost five times higher than the official inflation rate,” Hanke said.
Thus, the associated true misery index could be as high as 301, not 79.4, the economist said.
On the other end of the scale, of the 89 countries ranked by the index, Japan ranks as the least miserable country, with an index score of 5.41.
Top 10 most miserable countries
|#||Country||Highest contributing factor||Index score
Top 10 least miserable countries
|#||Country||Highest contributing factor||Index score|
|4||Republic of Korea||Interest rates||6.77|
|8||China||Real GDP growth||7.90|