I don't think you can answer this question until you have literally listened to every piece of music that was released. We are only aware of the smallest fraction of music released world-wide.
Subject to the foregoing limitations, my favorite year was 1992.
1992 saw great records from my favorite artists - Copper Blue, Automatic For The People, Nonsuch, Kiko
Allmusic has a series of articles on differerent years. Here is 1992:
http://blog.allmusic.com/2010/05/24/...-loves-1992-2/
1991 may have been the Year Punk Broke but 1992 was the year the ’90s truly began. Nevermind Nirvana, there was an explosion of alt-rock classics, beginning with a clutch of grunge classics from Seattle — the aftershocks of Nirvana’s success being Pearl Jam, Alice in Chains, Soundgarden, a major label contract for Mudhoney — but also Pavement’s debut Slanted and Enchanted, which began indie-rock as we now know it, and R.E.M.’s Automatic for the People, which began adult alternative as we now know it. R.E.M. wasn’t the only ’80s college-rock veteran still experiencing a golden streak — Morrissey teamed up with Mick Ronson for the crushing Your Arsenal, Bob Mould revitalized himself with Sugar, Sonic Youth got louder and tighter on Dirty, XTC closed out their golden age with Nonsuch — but there were just as many records that pointed toward what the ’90s would be: Dr. Dre’s era-defining The Chronic, which introduced Snoop Dogg to the world; PJ Harvey’s lacerating Dry; Beastie Boys’ cross-cultural, retro-loving Check Your Head; and over in Britain, Britpop started with a clutch of classic singles from Suede, Blur, and Pulp. Add to that power-pop classics by Matthew Sweet and Lemonheads, one of Tom Waits’ best albums, Paul Weller’s solo debut, Black Crowes’ muscular rock & roll and Urge Overkill’s Stull EP, 1992 winds up as one of the best years of the decade.