Inflation is a disease that can wreck a society, Milton Friedman, the late Nobel laureate economist, once said. Add rising unemployment to the diagnosis, and his profession ascribes a rather non-technical term to the debilitating effect on people: misery.
That affliction this year will be most acute in Venezuela, Argentina, South Africa, Ukraine and Greece — the five most painful economies in which to live and work, according to Bloomberg survey data that make up the so-called misery index for 2015. (It’s a simple equation: unemployment rate + change in the consumer price index = misery.)
In Ukraine’s case, war will exact greater economic casualties. Tension with Russia-backed rebels will prolong joblessness in the eastern-European nation, and inflation won’t offer much relief, the surveys showed. The one-two punch means Ukrainian consumers are set to be the fourth-saddest among 51 economies (including the euro area) based on forecasts for the misery measure.
Adding to the agony is the relatively abysmal income growth that will fail to cushion Ukrainian households against the still-surging prices. At $8,494 gross domestic product per capita this year, Ukraine only edges out the Philippines among the countries surveyed and measured with the International Monetary Fund’s proxy for resident income.
Unemployment probably will climb to 9.5 percent in Ukraine this year from its 8.9 percent rate as of the third quarter in 2014, the survey data show. Inflation is projected to rise at a 17.5 percent pace in 2015, compared with the 24.9 percent December year-over-year rate.