Sunday October 12, 2008

Hyperinflation : Zimbabwe inflation rate soars to 231 million percent

This article belongs to the Zimbabwe inflation watch story arc.

channelnewsasia.com :

Zimbabwe's annual inflation rate soared to 231 million percent in July 2008, confirming the daily hardships of a nation driven into poverty and trapped in a political impasse. Staggering increases in the price of bread and cereals were the main reason for the jump from the June rate of 11.2 million percent, the Herald said. Shortages of wheat are driving up bread prices. Harare-based economist Best Doroh said the actual inflation figure could be much higher, as a shortage of foreign currency has caused the value of the local unit to plummet daily.

Once hailed as a model economy and a regional breadbasket, Zimbabwe's fortunes have nosedived since 2000 when Mugabe seized white-owned farms and handed them over to landless blacks, often with no farming skills. But the government blames the country's economic meltdown on sanctions imposed by Britain and its allies. The currency is in freefall, unemployment is at 80% while food and essential goods are in short supply and the vast majority of people go hungry every day. The government has tried several measures including price controls and striking off 10 zeros from the country's currency to try to rein in galloping hyperinflation. Shops sometimes change the prices of goods more than twice a day while depositors line up in long queues at banks to withdraw cash which is rapidly losing its value. At the end of September, the bank also introduced 10,000- and 20,000-dollar bank notes.

- Just as I said earlier, if nothing in the underlying system is fixed, Zimbabwe's hyperinflation will roll on, and it has, indeed, rolled on. It has been barely 2 months since they chopped 10 zeroes from their currency, and it looks like they are adding the zeroes right back on again.

It's a ghastly situation. For outside observers, it's a sneak preview of what may yet come, if world leaders are not careful about the way they go about trying to fix the ongoing worldwide financial market meltdown.

See also :

1. Runaway hyperinflation : Zimbabwe inflation rate hits 2.2 million percent officially
2. Hyperinflation : Zimbabwe introduces $100 billion dollar banknotes
3. Zimbabwe chops 10 zeroes from currency notes as hyperinflation rolls on
4. Zimbabwe inflation rate soars to 11.2 million percent

(2008-10-12 10:22:45 SGT) [Biz] Permalink

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