The Economy of Zimbabwe
Hyperinflation, 2007 to 2008
The government printed money to cover deficits, and prices doubled every day at the peak in 2008, wiping out savings.
One of the worst in history.
Cause
Deficits financed by the central bank and a collapse in production.
Scale
Monthly inflation peaked at an estimated 79.6 billion per cent in November 2008.
Notes
The central bank issued a 100 trillion dollar note, worth a few US dollars.
Effect
Savings and pensions were wiped out, and shops emptied.
A trillion-dollar bill
People needed bags of cash to buy bread.
Assuming hyperinflation is a natural disaster
It results from policy choices.
Key takeaways
- Money printing drove inflation.
- Prices doubled daily at the peak.
- Trillion-dollar notes were issued.
- Savings were wiped out.
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