Hanke’s Top Five Worst Inflations: COVID-19 is Front and Center

Each day, I accurately measure inflation for countries experiencing elevated inflation rates using high-frequency data and the principle of Purchasing Power Parity. Below is my list of the five countries suffering from the highest inflation rates in the world.

The uncertainty and volatility in the financial markets is having a significant effect on foreign exchange trading. With COVID-19 causing widespread panic across the globe, the value of unstable currencies, like the currencies below, have plummeted.

1) Venezuela – Inflation Rate of 2,590%/yr

Venezuela holds down the top spot on my list, with an annual inflation rate of 2,590%/yr. Note that my MEASUREMENT of the implied inflation rate is accurate and much lower than the widely reported International Monetary Fund’s (IMF) end‐of‐year FORECAST. Note that I can MEASURE high inflation episodes with great accuracy, but no one can FORECAST their durations or magnitudes. Never mind. The IMF routinely attempts the impossible: to FORECAST inflation in high inflation environments.

2) Zimbabwe – Inflation Rate of 839%/yr

Today’s annual inflation rate has reached a whopping 839%/yr. Meanwhile, Zimbabweans continue to suffer from starvation and lack of crucial resources thanks to Zimbabwe’s new junk currency. Many businesses are ignoring government policy restricting the use of foreign currency, further contributing to the decline in value of the Zimbabwean currency.

3) Syria – Inflation Rate of 140%/yr

Following the signing by President Trump on December 27th of the Caesar Syria Civilian Protection Act, which slapped new harsh sanctions on Syria’s leaders, the Syrian pound has been under pressure. Since December 27th, the Syrian pound has depreciated by 23%, while implied annual inflation has risen from 85%/yr to 140%/yr.

4) SudanInflation Rate of 61%/yr

The power-sharing agreement, which was signed over the summer between the military council and pro-democratic forces, promised a new era of stability in Sudan. However, since Abdalla Hamdok was sworn in as prime minister on August 21st, the Sudanese pound has depreciated by 38%.

5) Argentina – Inflation Rate of 57%/yr

On October 27th, the ticket of Alberto Fernandez and Christina Kirchner defeated the incumbent President of the Argentine Republic Mauricio Macri. Days after the primary election on August 11th, Argentina’s inflation soared to 107%/yr from its pre-election rate of 64%/yr. Today, Argentina’s annual inflation rate is 57%/yr. Since August 11th, the peso has depreciated by 26%

Since WHO declared the coronavirus outbreak a pandemic on March 11th, the currencies of these countries have depreciated by the percentage listed below:

Venezuela – bolivar: 12.05%

Zimbabwe – RTGS: 8.89%

Syria – pound: 20.96%

Sudan – pound: 0%

Argentina – peso: 2.1%


Authored by Steve H. Hanke, Professor of Applied Economics at Johns Hopkins University. Follow him on Twitter @Steve_Hanke.