Scenes from Zimbabwe’s Hyperinflation

This story is woefully underreported in U.S. media, but Zimbabwe’s hyperinflation is spiraling to unknown places. Here are some factoids:

  • October’s annualized inflation was 14,840%, up nearly double from September
  • The highest paper currency, the Z$200,000 note, has almost disappeared
  • Cash machines don’t work because it takes only four customers to empty them
  • Cash has become tradable, attracting a 20% face premium when swapped for fuel and beef
  • Other prices
    • Bus fare: Z$1.6-million
    • Bread: Z$800,000
    • Pint of beer: Z$700,000

In a move that will almost certainly make things even worse, Zimbabwe’s Mugabe government — the creator of this loony Mugabenomics — said it would step up the price controls that have been driving this. Horrific and tragic.

More here.


  1. Bernake is taking notes.

  2. I remember the same type of commentary about Turkey. Howard Stern had a “who wants to be a turkish millionaire” contest. It took about 5 years to climb up from the bottom of the pit. the lira has gained about 30% over teh USD, YoY.

  3. Zimbabwe was quite a big story in Britain for a while, when Mugabe was throwing the whites off their land so he could give it to his thugs. The Iraq war also gave it a boost because of the “If we’re saving Iraq, why not Zimbabwe?” argument. It’s been “old news” for years now though. Hyperinflation, empty shelves, oppression, blah, blah. Just another day in the Third World.
    Not many people outside Zimbabwe are probably aware now that it used to be one of the most promising African countries until Mugabe turned it from “the breadbasket of Africa” to a food importer.

  4. James Byers says:

    I was in Zimbabwe in early September. A beer at a hotel in Victoria Falls was 60K ZWD. An expensive entree priced for tourists was about 1M ZWD. The de-facto exchange rate at that time was about 25K ZWD – 30K ZWD to 1 USD. Less than 90 days later, we’re well over 10x that rate.
    An interesting side note is that we were told not to use ATMs in the country at that time because the exchange rate was still fixed at the last ‘official’ rate of 250 ZWD to 1 USD. (Note that’s 250 revalued ZWD as of August, 2006 when they were swapped 1000 to 1.)
    By comparison, Turkey’s high-water annual inflation rate as in the neighborhood of 100% in 1994. These are crises of utterly different sorts. Zimbabwe has collapsed, it’s sadly just not widely reported.

  5. Zimbabwenomics is the frontier of economics as far as we are concerned. Mugabe will win the Economics Prize one day for his work.

  6. I would say the underreported story is that of the significant GDP growth and the overall drop in inflation into the single digits for most African countries for the first time in five years. Zimbabwe is indeed the exception. But, how many people in North America know about Mugabe vs. someone like Kigame, who is making serious headway in implementing macroeconomic reforms in Rwanda.