Hyperinflation in Zimbabwe

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Date	Rate	Date	Rate	Date	Rate	Date	Rate	Date	Rate	Date	Rate
v • d • e Zimbabwean inflation rates (official) since independence
1980	7%	1981	14%	1982	15%	1983	19%	1984	10%	1985	10%
1986	15%	1987	10%	1988	8%	1989	14%	1990	17%	1991	48%
1992	40%	1993	20%	1994	25%	1995	28%	1996	16%	1997	20%
1998	48%	1999	56.9%	2000	55.22%	2001	112.1%	2002	198.93%	2003	598.75%
2004	132.75%	2005	585.84%	2006	1,281.11%	2007	66,212.3%	2008	1,694,000% est (May)

At Independence in 1980, the Zimbabwe dollar was worth about USD 1.25. Since then, rampant inflation and the collapse of the economy have severely devalued the currency, causing many organisations to favour using the US dollar instead. Inflation was stable until Robert Mugabe began a program of land reforms that primarily focused on taking land from white farmers and redistributing those properties and assets to others; this in turn sent food production and revenues from export of food plummeting.^[1]^[2]^[3]

Early in the 21st century Zimbabwe started to experience hyperinflation. Inflation reached 624% in early 2004, then fell back to low triple digits before surging to a new high of 1,730% in March 2007. In June 2007 the government released the latest figures of 7,638%.^[4] The predictions for the annual inflation range from 3,000% (according to the IMF) to 8,000%.^[5]

On 16 February 2006, the governor of the Reserve Bank of Zimbabwe, Dr Gideon Gono, announced that the government had printed ZWD 21 trillion in order to buy foreign currency to pay off IMF arrears.

In early May 2006, Zimbabwe's government began rolling the printing presses again to produce about 60 trillion Zimbabwean dollars. The additional currency was required to finance the recent 300% increase in salaries for soldiers and policemen and 200% for other civil servants. The money was not budgeted for the current fiscal year, and the government did not say where it would come from.

In August 2006, the Zimbabwean government issued new currency and asked citizens to turn in old notes; the new currency (issued by the central bank of Zimbabwe) had three zeroes slashed from it. Most financial analysts remained skeptical and said that the new money would not provide relief from record inflation.^[6]

In February 2007, the central bank of Zimbabwe declared inflation "illegal", outlawing any raise in prices on certain commodities between March 1 and June 30, 2007. Officials have arrested executives of some Zimbabwean companies for increasing prices on their products. Such measures, frequently tried during other episodes of hyperinflation, have always failed. ^[7]^[8]

In June 2007, inflation in Zimbabwe had risen to 11,000% from an earlier estimate of 9,000%. U.S. ambassador Christopher Dell predicted it would reach 1.5 million percent by December 2007.^[9], although in the event the IMF estimated a rate of "only" 115,000% for that month, and 150,000% for January 2008.^[10] The government is currently circulating a $200,000 note,^[11] and reports of extreme shortages of basic foodstuffs, fuel, and medical supplies abound.^[12]^[13] The government instituted a six-month freeze on wages on September 1, 2007. ^[14]

The Reserve Bank of Zimbabwe issued a ZWD 10,000,000 note in January 2008, roughly equivalent of 4 US dollars .^[15] Zimbabwe's inflation soared to a record high of 26,470.8 percent as the economy contracted by 6 percent, the central bank said.^[16]

In April 2008 the Reserve Bank of Zimbabwe issued a ZWD 50,000,000 note, which is approximately worth 1.20 US dollars. ^[17] In May 2008 the Reserve Bank of Zimbabwe issued bank notes or rather "bearer cheques" to the value of ZWD 100 million and ZWD 250 million.^[18]. Meanwhile inflation has surged to an estimated 165,000 percent ^[19] with some unconfirmed reports putting the figure as high at 400,000 percent. Ten days later, new notes with a value of ZWD 500 million (then equivalent to about USD 2) were issued ^[20]. The US ambassador to Harare has projected that inflation will soar to 1,500,000 percent by the end of 2008.