Inflation is the devil that eats away the value of your money over time. Economists define it as the annual percentage change in consumer prices. It affects your savings, cost of living, mortgage payments, and your overall financial situation. Most countries have stable and predictable inflation rates, which is considered healthy for an economy. But many third-world and politically unstable countries are struggling with sky-high inflation. Here we take a look at the top 10 countries with the highest inflation rate in the world.
There are several developing nations that don’t have a strong central bank or a robust financial system. So, those in power often play with the currency to meet their short-term objectives, ignoring the long-term impact of their actions. Almost all countries listed below have a highly unstable political and economic environment.
The ranking is based on data from the International Monetary Fund’s World Economic Outlook report. The annual inflation rate in the US was just 0.6% while the global inflation stood at 3%, according to the report. Governments, businesses, and central banks use the inflation data to gauge the health of a country’s economy.
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When inflation is running high – such as in Zimbabwe and Venezuela – it becomes difficult for consumers to budget their expenditure. Businesses struggle to set the right price for their products.
10- Lebanon, 17%
According to the World Economic Outlook, Lebanon’s inflation rate is 17%. It rose to as high as 46.5% in the month of April. The skyrocketing inflation has led to mass protests as people are left hungry and desperate. The Lebanese government has defaulted on its debt and its forex reserves have fallen to critical levels.
9- Angola, 20.7%
The African country has witnessed a Civil War, armed conflicts, political instability, and extreme poverty. But its economic conditions have improved significantly since it achieved political stability in 2002. According to IMF, Angola’s inflation rate is projected to rise further to 22.3% in 2021.
8- Haiti, 22.2%
Haiti’s inflation rate has jumped from 17.3% in 2019 to 22.2% this year. The country suffered a devastating earthquake in 2010, which killed more than 200,000 people and left more than 1.3 million people displaced. Haiti’s economy still hasn’t fully recovered from the disaster.
7- Libya, 22.3%
Libya’s inflation rate went up from just 4.6% in 2019 to 22.3% this year. It is projected to cool down a bit to 15.1% next year. Oil production in the war-torn country has come to a halt. Libya hasn’t witnessed peace since the NATO-led uprising that toppled Muammar Gaddafi almost a decade ago.
6- Yemen, 26.7%
Yemen is another war-torn country trying to stay afloat amid the military conflict and the COVID-19 pandemic. International humanitarian aid has also been drying up. The armed conflict between Saudi-backed government and Houthi rebels has displaced millions of people. The inflation rate in Yemen is projected to drop from 26.7% in 2020 to 5% next year.
5- Suriname, 27.9%
The South American country’s GDP has declined a whopping 26% from its 2014 peak. Under President Desi Bouterse, Suriname has witnessed rising foreign debt and one of the highest inflation rates in the world. President Desi Bouterse’s son has been sentenced to 16 years in prison for helping the Lebanese militant group Hezbollah set up a branch in Suriname.
4- Iran, 34.2%
The Iranian economy has been struggling for years, primarily due to the economic sanctions imposed by the US. The Central Bank of Iran aims to reduce the inflation rate to 22% by the end of this year. An estimated 45 million people in the country are struggling to put food on the table as food prices continue to skyrocket. The IMF projects inflation rate in Iran to be 33.5% in 2021.
3- Sudan, 81.3%
Sudan has been struggling with high inflation rates for more than a decade. The African nation’s inflation rate jumped from 51% in 2019 to 81.3% this year. It was as high as 114% in May 2020. The IMF estimates its inflation rate to be 91.1% in 2021. Political instability, armed conflicts, and deadly clashes have crippled the Sudanese economy.
2- Zimbabwe, 319%
Zimbabwe has an inflation rate of 319%. In 2008, it recorded an 89.7 sextillion percent inflation! The country was publishing 100 billion dollar bills. The current inflation levels have raised concerns that the African country could go back to the days of hyperinflation. Essential items remain scarce and the prices have been rising at alarming rates.
1- Venezuela, 15,000%
Crisis-hit Venezuela has the highest inflation rate in the world. It recorded a 65000% inflation in 2018, which cooled to 19,910% in 2019, and 15,000% in 2020. According to IMF, the South American nation’s inflation rate will remain at around 15,000% in 2021. Millions of people have fled Venezuela amid the political and economic chaos.