The world became a more dangerous place last year amid a surge in terror-related acts and political instability, according to the annual Global Peace Index.

The average country peace score fell 0.53% compared with 2014 – the second consecutive year of decline and close to the low point recorded in 2012.

The economic impact globally was about $US13.6 trillion ($18.2 trillion) last year, or 13.3% of economic activity, according to the Institute for Economics & Peace.

“The results of the [index] reinforce the underlying trend of the past 10 years,” the institute says. “It finds the world has become slightly less peaceful when compared with the prior year. Given the increasing levels of terrorism and large population displacement caused by internal conflict, this trend is likely to continue into at least the near future.”

The number of deaths from terrorism grew 80% from 2014, while political instability has caused the number of refugees and displaced people to double to 60 million between 2007 and this year.

Iceland tops the list of 163 countries and territories as the most peaceful nation, followed by Denmark and Austria, while war-torn Syria ranks last.

New Zealand is fourth on the global list, making it the most peaceful country in the Asia-Pacific region, while Australia takes out 15^th spot.

Europe is the most peaceful of the nine regions covered, with the Middle East and North Africa region the least safe.

While terror acts have hit Paris and Brussels, other European countries including Portugal have achieved significant improvements in political, economic and social stability.

Improvements were also evident in the Asia-Pacific, most notably in Myanmar, which recently transited to a civilian government after decades of military rule.

However, growing territorial spats in the South China Sea are a cause of concern.