Topic > Zimbabwe's Hyperinflation - 1464

Have you ever seen a 100 trillion dollar bill? It may seem impossible, but in early 2009 the Zimbabwean government made it possible. The hyperinflation that hit Zimbabwe from 2004 to 2009 produced “hungry billionaires.” It reached its peak in 2008 at a rate of 231 million percent. Although the world has faced a series of runaway inflations, Zimbabwe is the only country that has experienced episodes of hyperinflation in the 21st century. According to the New York Times, hyperinflation has increased so frighteningly that “If you need something and you have cash, you buy it. If you have cash, spend it today, because tomorrow it will be worth 5 percent less” (Wines). In most cases, inflation is preceded by an increase in the money supply to meet the costs of wars, the end of empires, or the creation of new empires. Similarly, Zimbabwe entered the hyperinflation phase when government policies forced the RBZ (Reserve Bank of Zimbabwe) to print money which helped them pay off some debts but in return made the currency worthless. Debates continued and measures were taken to bring Zimbabwe out of this critical situation. Therefore, at the end of 2008, Zimbabwe's hyperinflation was controlled after the adoption of US monetary policy. In 1980, when Zimbabwe emerged as an independent country on the world map, annual inflation was 5.4%. This number increased monthly by 0.5%. At the time, a 20-dollar Zimbabwean dollar was the most dominant currency and was used in 95% of all Zimbabwean transactions. The weakening of Zimbabwe's economy began in 1999, when economic activities began to decline and public debt began to increase. In the years 2000 and 2001, following the redistribution of land, the agricultural routes were redistributed... middle of paper... queues by the hour for food which was not even guaranteed. However,dollarization was the right solution to replace Zimbabwe's currency which had become worthless. Although the economy faced many challenges such as infrastructure deficiencies, large external debt burden, and limited formal employment post-dollarization, Zimbabwe's GDP began to increase. According to the Confederation of Zimbabwe Industries, GDP grew by 5% in 2013 after a slow decline in the GDP rate in 2012. Furthermore, according to the Ministry of Finance and the RBZ, there is continuity in the increase in government revenue, of bank deposits, agricultural production and mining production. In conclusion, people are the essential part of the growth of an economy. Therefore, to continue this growth, people must have faith that hyperinflation will not return and that hard times are there to fight..