Hyperinflationary economies at 31 December 2021

Inflation in Iran started to increase at the end of 2018 and beginning of 2019. After a slight decrease and stabilisation by the end of 2019, inflation in Iran sharply increased during 2020. IMF data and forecasts provided by the Iranian Statistical Centre show that the three-year cumulative local inflation rate will be above 100% at the end of December 2021. Entities with the currency of Iran as their functional currency should continue to apply IAS 29 in 2021.

Since the beginning of 2020, inflation in Lebanon has increased significantly. Regardless of the fact that 2021 projections are no longer published by the IMF, local actual data at 31 March 2021 published by the Central Administration of Statistics showed that three-year cumulative inflation is expected to significantly exceed 100% at 31 December 2021. Based on the inflation data for 2019 and 2020, the cumulative inflation of those two periods would exceed 100% cumulative three-year inflation. Entities with the currency of Lebanon as their functional currency should continue to apply IAS 29 in 2021.

IMF data shows that three-year cumulative inflation is expected to exceed 100% at 31 December 2021, with a significant decrease compared with 2020. This tendency is expected to continue in 2022. South Sudan continues to be a hyper-inflationary economy in 2021. Entities with the currency of South Sudan as their functional currency should continue to apply IAS 29 in 2021. However, such entities should monitor the inflation in South Sudan during 2022 to confirm whether the currency of South Sudan continues to be hyper-inflationary.

Sudan became a hyper-inflationary economy in 2013. In 2016, it ceased to be hyper-inflationary, because three-year cumulative inflation at the end of that year was below 100% and was forecast to remain below 100%. Sudan became hyper-inflationary again in 2018. IMF data shows that three-year cumulative inflation is expected to significantly exceed 100% at 31 December 2021, and it is expected to remain significantly above that threshold in future years. Sudan continues to be a hyper-inflationary economy in 2021. Entities with the currency of Sudan as their functional currency should continue to apply IAS 29 in 2021.

Since the middle of 2020, inflation in Suriname has increased significantly. IMF and local data published by the General Bureau of Statistics of Suriname4 show that three-year cumulative inflation was 59% at 30 September 2020, 77% at 31 December 2020, 84% at 31 March 2021, and 132% at 31 August 2021, and it is expected to significantly exceed 100% at 31 December 2021. Entities with the currency of Suriname as their functional currency should use the actual data and apply IAS 29 for periods ending December 2021 as if the economy had always been hyper-inflationary. Such entities should continue to monitor inflation during 2022.

Venezuela became hyper-inflationary in 2009. IMF data shows that three-year cumulative inflation is expected to significantly exceed 100% at 31 December 2021 and in future years. Venezuela remains a hyper-inflationary economy in 2021. Entities with the currency of Venezuela as their functional currency should continue to apply IAS 29 in 2021.

IMF data shows that projected three-year cumulative inflation at 31 December 2021 is 115%, and it is expected to increase to 139% next year. Entities with the currency of Yemen as their functional currency should use the actual data and apply IAS 29 for periods ending December 2021 as if the economy had always been hyper-inflationary. Such entities should continue to monitor inflation during 2022.

Following a period of severe hyper-inflation more than 10 years ago, the government of Zimbabwe abandoned the Zimbabwe dollar, and other currencies such as the US dollar and the South African Rand became widely used as legal tender. However, in October 2018, the Zimbabwe currency was re-introduced so that other currencies are no longer legal tender. Inflation has increased significantly since the return to a national currency, and cumulative inflation since October 2018 exceeds 100%. IMF data shows that inflation continued to be significantly above the threshold of 100% in 2021. Entities with the currency of Zimbabwe as their functional currency should continue to apply IAS 29 in 2021.

Regardless of the fact that 2021 projections are no longer published by the IMF, data published by the local Central Statistics Agency showed that three-year cumulative inflation is approximately 90% at 30 September 2021. Given the high level of inflation during 2021, entities with the currency of Ethiopia as their functional currency should consider the information available at 31 December 2021 and, thereafter, consider whether IAS 29 is applicable.  Such entities should also continue to monitor inflation during 2022.

IMF data shows that three-year cumulative inflation is below 100% in 2021 but remains high (approx. 72%), and it is expected to decrease insignificantly in 2022 (approx. 67%). Entities with the currency of Haiti as their functional currency should not apply IAS 29 in 2021. Such entities should continue to monitor inflation during 2022.

Consistent and reliable inflation data for Syria is not available. However, European Union and United Nations trade sanctions remain in force. The information that is available, including some local data, suggests that Syria might be a hyper-inflationary economy in 2021. Entities with the currency of Syria as their functional currency should consider the information available at 31 December 2021, to consider whether IAS 29 is applicable.