Hanke Weekly Inflation Roundup
The economic principle of Purchasing Power Parity (PPP) allows for this transformation.
I compute the implied annual inflation rates with high-frequency data and report them on a daily basis. PPP is used to translate changes in the black-market exchange rates into annual inflation rates. For the countries that I follow each day, the table below shows the annual rates for the seven countries with the highest inflation rates.
At present, Venezuela is suffering from hyperinflation and holds down the top spot on my list, with an annual inflation rate of 18,926%. Note that my measurement of the implied inflation rate is much higher than the widely reported International Monetary Fund’s (IMF) end-of-year forecast of 12,870% (13,000% rounded). A comparison of my measurements with the IMF’s projections for the other six countries’ year-end annual inflation rates shows that the IMF's projections are similarly way off the mark.
Indeed, my current measured inflation rates for “today” exceed those that the IMF projects, with the exception of South Sudan's, by a wide margin. Given these large divergences and the IMF’s poor record of forecasting inflation in countries experiencing elevated inflation rates, one wonders why the financial press reports the IMF forecasts, and why it does so with such reverence.