February 3, 2025 | 02:23 pm
TEMPO.CO, Jakarta - For the past years, the world economy has been slowly stabilizing following the Covid-19 pandemic. Inflation, deflation, and dynamic exchange rates have become a common globally concerns. As countries experience economic instability in the wake of the pandemic, several countries are experiencing soaring inflation.
In this article, we’ll use the latest data presented by Global Finance to provide insights on the countries with the highest inflation rates..
How Does Inflation Affect Currency?
Inflation is an increase in the price of goods and services over time, which reduces the purchasing power of money and diminishes the value of investments. Generally, inflation occurs to any group of commodities and services including housing, food, medical care, transportation, apparels, cosmetics and automobiles.
Inflation, interest rates, and exchange rates between nations are closely tied. As highlighted by Investopedia, higher inflation rates lower a country’s currency value in comparison to other currencies. A volatile currency can drive away foreign investors, who seek stable investments.
Countries with Highest Inflation Rates
According to Global Finance, Zimbabwe, Argentina, and Sudan are the countries with the highest inflation rates in the world. But who else makes the list? :
1. Zimbabwe - 1 USD = 322.000 ZWL
Despite seeing a fall from the previous year, Zimbabwe has endured a soaring inflation rate in 2024 at 560.981. Zimbabwe has long battled high inflation. In 2007 to 2008 Zimbabwe experienced a period of hyperinflation, where a loaf of bread cost as much as $10 trillion Zimbabwean dollars. According to Investopedia, the Zimbabwean dollar became one of the most inflated currencies once the hyperinflation period reached its end.
2. Argentina - 1 USD = 1,050 ARS
As the global pandemic threatened most countries’ finances, Argentina experienced some of the greatest economic challenges. Despite this, the nation has maintained an inflation rate below 100 points from 2020 to 2022. However, the worst was yet to come. In 2023, severe inflation hit Argentina at a rate of 133.489 and continued to rise to 249.793 in 2024.
3. Sudan - 1 USD = 600.933 SDG
Sudan has had one of the world’s most inflated currencies for a few years. This is a result of the country’s ongoing political instability, leaving a massive budget deficit. According to the expatriate group, the government of Sudan opted to print more money to provide economic support.
4. Venezuela - 1 USD = 56.579 VES
Over the past years, Venezuela has experienced fluctuating inflation rates, going from 2,355 in 2020, 1,588 in 2021, to 186,5 in 2022 and 337,5 in 2023. In 2024, the country's inflation rate of 99,9 was due to a large reliance on imports for basic goods and government corruption. Venezuela had to print money to buy imported goods, which resulted in a leap of its inflation rates.
5. Turkiye - 1 USD = 35,67 TRY
Closing the list of the countries with highest inflation rates is Turkiye which has been experiencing a devaluation of its currency. Becoming one of the most inflated currencies, the Lira is experiencing poor exchange rates. According to the expatriate group, the devaluation is a product of government policy in an effort to reduce inflation.
The countries highlighted in this article demonstrate how factors like political instability, economic mismanagement, and external market pressures contribute to having the most inflated currency in modern times. On the contrary, there are some nations currently boasting the strongest currencies in the world as listed here.
Aris Schuler-Shah contributed to the writing of this article.
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