Transcript Hyperinflation In Zimbabwe

Hyperinflation In
Zimbabwe
Historical Timeline
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1920 known as Rhodesia
annexed by UK in 1923
1961- white favored constitution
1965- gov't declared independence
1979- UN sanctions and guerrilla uprising
resulted in free elections
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Mugabe and His Country
'80-'87 Mugabe is Prime Minister becomes
Pres in '87
2000- land redistribution causes large exodus
of white farmers
2002- election rigged by mugabe
'02-present- Mugabe still President
- corruption rampant
- policy making is
dormant
05- Mugabe starts demolishing homes and
Economic issues in Zimbabwe
1. Increase in money not supported by growth
and distribution of goods and services
2. The source of inflation is Zimbabwe's
reserve bank
3. This causes imbalance in Supply and
Demand
4. The monetary authority is borrowing money
to pay for all of its expenses
Zimbabwe Today
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‘98-’08 there was an economic contraction
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'07- LET HYPERINFLATION BEGIN!!
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Economic Problems
- infrastructure and regulatory deficiencies
- ongoing indigenization pressure
- Policy uncertainty
- large external debt burden
- insufficient formal employment
Most Current & Severe Statistics
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GDP 7,474,000,000
Pop. 12,571,454
Unemployment 98%
GDP per capita $500
Avg inflation 1000%
Highest inflation 79.6 billion% (2nd all time)
Zimbabwe's Hyperinflation
Date
Month-over-Month Inflation
Rate (%)
Year-over-Year Inflation Rate(%)
Dec-07
240.06
66212.30
Jan-08
120.83
100580.16
Feb-08
125.86
164900.29
Mar-08
281.29
417823.13
Apr-08
212.54
650599.00
May-08
433.40
2233713.43
Jun-08
839.30
11268758.90
Jul-08
2600.24
231150888.87
Aug-08
3190.00
9690000000.00
Sep-08
12400.00
471000000000.00
Oct-08
690000000.00
3840000000000000000.00
Nov-08
79600000000.00
89700000000000000000000.00
GDP per Capita
Unemployment Rate
Other Interesting Facts
Life Expectancy- women 33.5 yrs
- men 37 yrs
Literacy rate- adult 90%
- women 86%
Ethnic Groups- 98% African
1% Mixed and Asian
<1% White
What Zimbabwe Looked Like
Zimbabwe Economics 2008
Curing Hyperinflation
According to an article by Foreign Policy
hyperinflation in Zimbabwe has been
eliminated
Elimination of Zimbabwe currency
Money supply has been cut by 1000%
Capacity utilization in the economy is up
from 4 percent to nearly 50 percent
GDP was about 4% this year and is
expected to raise to 6%
Now that inflation is over the economy levels
are returning to the natural rate
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Summary of Issue
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The government printed money to finance
their expenses
Increase in money is not supported by
demand of goods and services
President redistributed land to white farmers
causing high unemployment
Elimination of Zimbabwe currency reduces
inflation by 1000%
Bibliography
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http://www.cato.org/zimbabwe
http://www.indexmundi.com/g/g.aspx?c=zi&v=66
http://www.worldstatesmen.org/Zimbabwe.html
http://www.usaid.gov/zw/economic_growth.html
https://store.cato.org/publications/development-policyanalysis/zimbabwe-hyperinflation-growth
6. http://atlasnetwork.org/wpcontent/uploads/2009/05/cato__on_the_measurement_of_zimbabwes_hyperinflation13
.pdf
7. Zimbabwe Economics 2008
8. http://www.nytimes.com/2005/06/11/international/africa/
11zimbabwe.html?pagewanted=all