The report revealed Syria was the most dangerous country in the world for the second year running, as it continues to be ravaged by the deadliest civil war in the 21st century
It was followed by South Sudan (162nd safest), Iraq (161st safest), Afghanistan (160th safest) and Somalia (159th safest).
Yemen, Ukraine and Libya suffered the greatest deteriorations and entered the top 10 most dangerous countries, as conflicts in the three countries show little sign of abating.
The Democratic Republic of Congo, Pakistan and North Korea maintained "very low" peace ratings but climbed out of the bottom 10.
The countries were ranked on "militarisation, society and security, and domestic and international conflict".
Iceland was named the world's most peaceful country for the sixth year in a row, followed by Denmark, Austria, New Zealand and Portugal.
Panama, Thailand and Sri Lanka showed greatest improvements in peace.
In Brazil, a 15 per cent increase in political instability coupled with deteriorations in both the incarceration and police rates, presents a worrying trend just months before the start of the 2016 Olympic Games in Rio de Janeiro.
While the majority of terrorist activity was highly concentrated in five countries - Syria, Iraq, Nigeria, Afghanistan and Pakistan - the breadth of terrorism is spreading, with only 23 per cent of countries in the index not experiencing a terrorist incident.
Europe, which was once again the most peaceful region in the world, saw its average score deteriorate in this year's report in the wake of terrorism incidents in Paris and Brussels, with deaths from terrorism in Europe having more than doubled over the past five years.
According to the report: "The single greatest indicator change occurred on terrorism impact, which deteriorated by more than 20 per cent on average, followed by refugees and internally displaced people and internal conflict deaths."
It said terrorism was "at an all-time high, battle deaths from conflict are at a 25-year high, and the number of refugees and displaced people are at a level not seen in 60 years."
Refugees and displaced persons have risen dramatically over the past decade, doubling to approximately 60 million people between 2007 and 2016, nearly one per cent of the world's population.
The report found: "There are nine countries with more than 10 per cent of their population classified as refugees or displaced persons with Somalia and South Sudan having more than 20 per cent of their population displaced and Syria with over 60 per cent displaced."
The study found that, while 81 countries improved, the deterioration in another 79 outweighed these gains, meaning that peace declined at a faster rate than in the previous year.
Despite this some of the most peaceful countries are now recording historically high levels of peace.
The economic impact of violence on the global economy totalled $13.6 trillion or 13.3 per cent of gross world product, equivalent to 11 times the size of global foreign direct investment.
The economic impact of violence was $137 trillion over the last decade - greater than global GDP in 2015.
TOP FIVE SAFEST COUNTRIES
Iceland
Denmark
Austria
New Zealand
Portugal
THE FIVE LEAST SAFE COUNTRIES
Syria
South Sudan
Iraq
Afghanistan
Somalia
