IFRB 2026/04 Hyperinflationary Economies Update - H1 2026
IFRB 2026/04 Hyperinflationary Economies Update - H1 2026
IAS 29 Financial Reporting in Hyperinflationary Economies applies when an entity’s functional currency is ‘hyperinflationary’.
IAS 29 requires the financial statements (including any comparative periods) to be stated in terms of the measuring unit current at the end of the applicable reporting period. This is because the currency of a hyperinflationary economy loses a significant amount of purchasing power from period to period such that presenting financial information based on historical amounts, even if only a few months old, does not provide relevant information to users of financial statements.
The term ‘hyperinflation’ is not defined in IAS 29, as it is a matter of judgment. IAS 29 provides the following example characteristics of a hyperinflationary economy (IAS 29.3):
(a) the general population prefers to keep its wealth in non-monetary assets or in a relatively stable foreign currency. Amounts of local currency held are immediately invested to maintain purchasing power;
(b) the general population regards monetary amounts not in terms of the local currency but in terms of a relatively stable foreign currency. Prices may be quoted in that currency;
(c) sales and purchases on credit take place at prices that compensate for the expected loss of purchasing power during the credit period, even if the period is short;
(d) interest rates, wages and prices are linked to a price index; and
(e) the cumulative inflation rate over three years is approaching, or exceeds, 100%.
The International Monetary Fund (IMF) publishes historical and projected inflation data by country.
In July 2025, the IFRS Interpretations Committee (the Committee) published an agenda decision titled Assessing Indicators of Hyperinflationary Economies. The request asked a number of questions about assessing whether an economy is hyperinflationary, such as whether all indicators in IAS 29.3 should be considered in assessing when an economy becomes hyperinflationary, including whether to continue to consider all indicators even when one indicator in IAS 29.3 has been met. Evidence gathered by the Committee indicated little, if any, diversity in understanding the requirements for assessing when an economy becomes hyperinflationary. According to the evidence gathered, stakeholders do not conclude that an economy becomes hyperinflationary based solely on one of the indicators listed in IAS 29.3, such as the cumulative inflation rate.
During 2026, the list of hyperinflationary economies (and those economies on our watchlist) has continued to evolve due to deteriorating economic conditions and high inflation in several countries. The jurisdictions on the list of hyperinflationary economies must apply IAS 29, which results in financial statements (both current and prior comparative periods) being restated to reflect current inflation rates.
Based on the IMF’s April 2026 World Economic Outlook (IMF WEO), below is an updated snapshot of countries which are hyperinflationary as at 30 June 2026, countries which have become hyperinflationary (or have ceased to be hyperinflationary) during the first half of 2026, and countries which are at risk of becoming hyperinflationary in the second half of 2026 and beyond.
1 Burundi: the IMF WEO forecasts annual inflation of 19% for 2026, bringing the 3-year cumulative rate down to 87%. Given the consistent reduction in annual inflation, Burundi is no longer considered hyperinflationary as at 30 June 2026.
2 Sierra Leone: the IMF WEO forecasts the 3-year cumulative rate down to be 29% by the end of 2026. Given the consistent reduction in annual inflation, Sierra Leone is no longer considered hyperinflationary as at 30 June 2026.
This publication has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only. The publication cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained therein without obtaining specific professional advice. Neither BDO IFR Advisory Limited, and/or any other entity of BDO network, nor their respective partners, employees and/or agents accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this publication or for any decision based on it.
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Service provision within the BDO network in connection with International Financial Reporting Standards (IFRS) Accounting Standards (comprising IFRS Accounting Standards, International Accounting Standards, and Interpretations developed by the IFRS Interpretations Committee and the former Standing Interpretations Committee), and other documents, as issued by the International Accounting Standards Board, IFRS Sustainability Disclosure Standards as issued by the International Sustainability Standards Board, and European Sustainability Reporting Standards (ESRS) published in the Official Journal of the European Union, is provided by BDO IFR Advisory Limited, a UK registered company limited by guarantee. Service provision within the BDO network is coordinated by Brussels Worldwide Services BV, a limited liability company incorporated in Belgium.
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IAS 29 requires the financial statements (including any comparative periods) to be stated in terms of the measuring unit current at the end of the applicable reporting period. This is because the currency of a hyperinflationary economy loses a significant amount of purchasing power from period to period such that presenting financial information based on historical amounts, even if only a few months old, does not provide relevant information to users of financial statements.
The term ‘hyperinflation’ is not defined in IAS 29, as it is a matter of judgment. IAS 29 provides the following example characteristics of a hyperinflationary economy (IAS 29.3):
(a) the general population prefers to keep its wealth in non-monetary assets or in a relatively stable foreign currency. Amounts of local currency held are immediately invested to maintain purchasing power;
(b) the general population regards monetary amounts not in terms of the local currency but in terms of a relatively stable foreign currency. Prices may be quoted in that currency;
(c) sales and purchases on credit take place at prices that compensate for the expected loss of purchasing power during the credit period, even if the period is short;
(d) interest rates, wages and prices are linked to a price index; and
(e) the cumulative inflation rate over three years is approaching, or exceeds, 100%.
The International Monetary Fund (IMF) publishes historical and projected inflation data by country.
In July 2025, the IFRS Interpretations Committee (the Committee) published an agenda decision titled Assessing Indicators of Hyperinflationary Economies. The request asked a number of questions about assessing whether an economy is hyperinflationary, such as whether all indicators in IAS 29.3 should be considered in assessing when an economy becomes hyperinflationary, including whether to continue to consider all indicators even when one indicator in IAS 29.3 has been met. Evidence gathered by the Committee indicated little, if any, diversity in understanding the requirements for assessing when an economy becomes hyperinflationary. According to the evidence gathered, stakeholders do not conclude that an economy becomes hyperinflationary based solely on one of the indicators listed in IAS 29.3, such as the cumulative inflation rate.
During 2026, the list of hyperinflationary economies (and those economies on our watchlist) has continued to evolve due to deteriorating economic conditions and high inflation in several countries. The jurisdictions on the list of hyperinflationary economies must apply IAS 29, which results in financial statements (both current and prior comparative periods) being restated to reflect current inflation rates.
Based on the IMF’s April 2026 World Economic Outlook (IMF WEO), below is an updated snapshot of countries which are hyperinflationary as at 30 June 2026, countries which have become hyperinflationary (or have ceased to be hyperinflationary) during the first half of 2026, and countries which are at risk of becoming hyperinflationary in the second half of 2026 and beyond.
| Economies which were hyperinflationary as at 31 December 2025 | Economies which have become hyperinflationary in 2026 |
Economies which have ceased to be hyperinflationary in 2026 | Economies expected to be hyperinflationary as at 30 June 2026 | Watchlist for the future (new) |
| • Argentina • Burundi • Haiti • Islamic Republic of Iran • Lebanon • Malawi • Sierra Leone • South Sudan • Sudan • Türkiye (Turkey) • Venezuela • Zimbabwe |
None | • Burundi1 • Sierra Leone2 |
• Argentina • Haiti • Islamic Republic of Iran • Lebanon • Malawi • South Sudan • Sudan • Türkiye (Turkey) • Venezuela • Zimbabwe |
• Angola • Egypt • Myanmar • Nigeria • Syria |
1 Burundi: the IMF WEO forecasts annual inflation of 19% for 2026, bringing the 3-year cumulative rate down to 87%. Given the consistent reduction in annual inflation, Burundi is no longer considered hyperinflationary as at 30 June 2026.
2 Sierra Leone: the IMF WEO forecasts the 3-year cumulative rate down to be 29% by the end of 2026. Given the consistent reduction in annual inflation, Sierra Leone is no longer considered hyperinflationary as at 30 June 2026.
This publication has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only. The publication cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained therein without obtaining specific professional advice. Neither BDO IFR Advisory Limited, and/or any other entity of BDO network, nor their respective partners, employees and/or agents accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this publication or for any decision based on it.
The BDO network (referred to as the ‘BDO network’ or the ‘Network’) is an international network of independent public accounting, tax and advisory firms which are members of BDO International Limited and perform professional services under the name and style of BDO (hereafter ‘BDO member firms’). BDO International Limited is a UK company limited by guarantee. It is the governing entity of the BDO network.
Service provision within the BDO network in connection with International Financial Reporting Standards (IFRS) Accounting Standards (comprising IFRS Accounting Standards, International Accounting Standards, and Interpretations developed by the IFRS Interpretations Committee and the former Standing Interpretations Committee), and other documents, as issued by the International Accounting Standards Board, IFRS Sustainability Disclosure Standards as issued by the International Sustainability Standards Board, and European Sustainability Reporting Standards (ESRS) published in the Official Journal of the European Union, is provided by BDO IFR Advisory Limited, a UK registered company limited by guarantee. Service provision within the BDO network is coordinated by Brussels Worldwide Services BV, a limited liability company incorporated in Belgium.
Each of BDO International Limited, Brussels Worldwide Services BV, BDO IFR Advisory Limited and the BDO member firms is a separate legal entity and has no liability for another entity’s acts or omissions. Nothing in the arrangements or rules of the BDO network shall constitute or imply an agency relationship or a partnership between BDO International Limited, Brussels Worldwide Services BV, BDO IFR Advisory Limited and/or the BDO member firms. Neither BDO International Limited nor any other central entities of the BDO network provide services to clients.
BDO is the brand name for the BDO network and for each of the BDO member firms.
© 2026 BDO IFR Advisory Limited, a UK registered company limited by guarantee. All rights reserved.
www.bdo.global