In the world of economics, inflation is often a major challenge for governments and populations. With the rapidly changing financial conditions of 2024, some countries are facing inflation that is disrupting not only their economies but also the daily lives of their citizens. In this article, we will look at which countries are on the frontline of this crisis and why their inflation is breaking all records.
1. Venezuela
Inflation in Venezuela is the highest in the world. Although the rate of increase has slowed down a bit recently, it is still at a whopping 436%. The country's Vice President Delcy Rodriguez attributes this slight slowdown to President Nicolas Maduro's policy of loosening control over the exchange rate and price system since 2018.
2. Lebanon
While the country is going through a political crisis with no end in sight as of 2019, Lebanon is increasingly plunged into an unprecedented economic crisis marked by the second highest inflation rate in the world at 269%. One of the reasons for these soaring prices is the depreciation of the pound sterling by more than 98% against the dollar on the black market. To solve the pricing problem, supermarkets have started to list prices in dollars.
3. Syria
Due to political instability caused by the country's 12-year war, international sanctions against the regime, and a severe economic crisis in Lebanon affecting the neighbouring country, Syria has the third highest inflation rate in the world at 139%.
4. Argentina
Argentina's inflation, which reached a 32-year high of 94.8% in 2022, has had a bad start to 2024, breaking the symbolic threshold of 100% to reach 109%. Argentina, Latin America's third largest economy, continues to struggle with chronic inflation, which has been hovering in double digits for more than twelve years. This is due to a multitude of reasons, both internal (persistent budget deficits, large-scale inflation expectations) and external (effects of the war in Ukraine, drought affecting the agri-food industry), that have hampered economic recovery.
5. Zimbabwe
Zimbabwe is also experiencing a serious economic crisis, with inflation at 87%. At the beginning of the year, the country even recorded the steepest increase in food prices in the world, according to the World Bank.
6. Suriname
Like the previous countries, Suriname has not escaped the economic crisis, breaking the 66% inflation mark. The country is prospering for two reasons: the first is mechanical, as the country pays for fuel imports in foreign currency, and with the exchange rate skyrocketing, the reason for the price hike is primarily arithmetic. And the second is political, because the government, to comply with the measures imposed by the IMF, has to phase out consumer subsidies.
7. Haiti
The country's consumer price index reached 48.2% year-on-year, according to the latest figures released by Haiti's Institute of Statistics and Informatics. Haiti's dizzying inflation curve is accelerating. Prices for food and soft drinks, clothing and footwear, housing and health care reached 48.6%, 57.3%, 36.1% and 44.9% respectively, while transport broke all records, exceeding 120% year-on-year.
8. Cuba
Cuba is one of the Latin American countries most affected by inflation, which took its inhabitants by surprise, as they were unaccustomed to such a phenomenon in the island's economic system. It all started when the communist government implemented a monetary reform in January 2021 to end the country's dual currency, one of which was equivalent to the dollar, which distorted the economy. However, the reform, carried out at the height of the pandemic, led to a devaluation of the Cuban peso, causing the price of the dollar to rise from 24 pesos to 120 pesos at the official exchange rate, and skyrocketing on the black market, where it trades at 180 pesos. Since then, inflation is officially at 46.4%.
Conclusion
With global economic changes, inflation becomes a powerful indicator of instability, affecting all aspects of life. The countries we have reviewed are experiencing first-hand the devastating effects of inflation as they struggle for economic survival. But these challenges also emphasise the importance of policy reforms and good resource management. It is important to remember that inflation is not only a threat, but also an opportunity for change that can revitalise economies and take them to a new level of development.
Wilfredo Huppert
Legal expert with 30 years of experience.