Zimbabwe inflation second worst in history of mankind
JOHANNESBURG – Zimbabwe's hyperinflation is now the second worst in history, according to a US study.
With goods unavailable and official statistics distrusted, Steve Hanke, of the Cato Institute in Washington, has developed his own hyperinflation index for Zimbabwe, the HHIZ, based on exchange rate movements and accurate market data.
Its latest calculation puts Zimbabwe’s inflation at 13.2 billion per cent a month, or 516 quintillion per cent (516 followed by 18 zeros) a year, overtaking 1994 Yugoslavia in the world rankings and putting it behind only Hungary in 1946.
In post-war Hungary, monthly inflation reached 12,950,000,000,000,000 per cent, with prices doubling every 15.6 hours.
"They still have a way to go to catch Hungary, but they are getting there," said Prof Hanke.
"This is conjecture, but if they keep going at this pace, they have a shot at it within a month or maybe a month and a half at the outside."
For ordinary Zimbabweans, the consequences are appalling. Their savings destroyed, they must spend money as soon as they obtain it before it loses its value, and at the same time the dysfunctional economy means that goods are in desperately short supply, and they must spend hours foraging around the city to find them.
"The economy just stops functioning or slows down very much," said Prof Hanke. "A lot of barter takes place. Money is not used as much or if it is, it’s all foreign exchange."
Supermarkets in Harare are already only accepting US dollars or South African rand, leaving those Zimbabweans without access to foreign currency in dire straits.
The latest official figure for inflation in Zimbabwe is 231 million per cent a year. President Robert Mugabe’s government blames supposed foreign sanctions for the country’s economic turmoil. The Telegraph