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Hyper Inflation

in Zimbabwe
A Case Study
18th September 2008

11.2 million % inflation!


How is Zimbabwe surviving?
A Zimbabwean holds a
new Z$ 500 million
note!!
Zimbabwe's inflation
rate has just touched a
stratospheric level of

11.2 million %!
Yes, 11.2 million per
cent, among the
rarest in world's
history!

Data on Zimbabwe Inflation


The signs of danger!!!

Inflation
625 per cent in early
2004.
In March 2007, it jumped
to 1,700 per cent .
By June 2007, shot up to
11,000 per cent.
In July 2008, skyrocketed
to 2.2 million per cent.
And now in September
2008, inflation has
reached uncharted area
at
11.2 million per cent!

Zimbabwean children eat at the Masarira primary


school, where about 30 pupils receive a daily
ration of beans and starch-based cereals during
their mid-morning break.

For some, it is the only meal


they will have in the day.
Why is Zimbabwe in this
situation?
over a decade of economic
recession
extreme food and fuel
shortage
unemployment rate of over
80 per cent
lack of political will to do
anything about it.
government's ban on relief
efforts by foreign NGOs
debilitating drought
scourge of the AIDS epidemic

The official portrait of President Robert


Mugabe hangs on the wall as Zimbabwaen
dollar bank notes are shown at the airport in
Bulawayo, Zimbabwe
The war with Congo
Gross mismanagement
and corruption in the
Zimbabwean government
Zimbabwe's ruler
President Robert Mugabe:
financial isolation by the
world, especially American
and European institutions
and governments, has led
to such a state of affairs.

A church aid organizer packs Z$65 billion ($2,000


USD) into a briefcase in Bulawayo, Zimbabwe
When did the problem
begin?

The war with


Congo broke out in
1998
In 2001 President
Robert Mugabe's
new orders to seize
commercial farms
owned by whites.

In Harare, a Zimbabwean counts a big stack of money to buy


some bananas!!!
So how are Zimbabweans
surviving?
Barely!!

You can just about buy a loaf of


bread for Z$1,000.
If you want a few bananas, you
need to pay a bagful of cash.
Consumers resorting to
bartering fuel coupons for goods,
such as household appliances and
furniture.
Some retailers prefer payment
in coupons instead of local
currency because of the rapid
devaluation of the Zimbabwe
dollar.

Money supply

Zimbabwe's $100 billion banknote with the number of eggs it


could purchase on its release date
http://en.wikipedia.org/wiki/Zimbabwean_dollar#Hyperinflation

Sep.
06

35 billion

Nov.
07

67 trillion

Dec.
07

100 trillion

21-01- 170 trillion


08
28-01- 800 trillion
08
Mar.

25 quadrillion

A Zimbabwean buys tomatoes in


Harare where Zimbabwe's annual
inflation has hit 231 million
percent in October

The (new) third $20,000 =


200,000,000,000,000 second $ =
200,000,000,000,000,000 first $

This is what it looks like in Zimbabwe


Inflation at 231 million percent a year
25 million Zimbabwe
dollars = 1 US $

Visiting the neighborhood


grocer!

The bill and how people pay in


restaurants!

Hard times
Driving a pushcart with sick Carrying home the purchases
relative from hospital where unable to afford bus fare
they could not find drugs

Country's economy in a tailspin, fuel prices at


an all time high:
Many goods cannot
make it to market

And few goods that make it to


market, to be guarded heavily

Now what next?

An estimated inflation rate of 400-500 million%????


This figure cannot be calculated precisely because most computers
are not capable of doing so with so many digits involved!!!!
When inflation is rampant, citizens stockpile goods, as they are
worth more than the money that could buy them. This creates a
scarcity of supply, and makes valuating inflation difficult.
Any taxes paid become nearly worthless by the time they reach the
government
Will Zimbabwe have to abandon their currency entirely and use
something else?
Will it take a fundamental change in government leadership to pull
the country back into the global scene?
Who will bail out Zimbabwe?
Why would they?
Why should they?

This 2 minutes and 19 seconds can be


shocking!
http://in.youtube.com/watch?v=I20UNlC6qWY

To know more about current details:


http://en.wikipedia.org/wiki/Economy_of_Zimbabwe