Date posted: April 5, 2008

Hyperinflation In Pictures

Zimbabwe is setting new records in terms of hyperinflation. In February annual inflation rose to more than 100,000 percent and the local currency tumbled to a record low of 25 million Zimbabwe dollars to one US dollar.

Back in May 2006 The New York Times asked how bad the inflation in Zimbabwe was. The answer then was pretty disastrous. The answer today would be catastrophic. It has caused the economy to come to a virtual stand still, has ravaged people’s livelihoods and has sent the country spiralling into rapid decline.

The hyperinflation represents a profound tragedy for the people of Zimbabwe, but it does make for some funny pictures. Some of the people can see the absurd humour of it as well. I did some datamining of the image banks over at Corbis, Reuters and Getty Images and compiled a small collection of images.

The root cause of hyperinflation is well known and always the same. The Central Bank prints too much money to pay for government expenditures. The problem with hyperinflation is that it tends to be self-perpetuating. When the government notices prices are rising, it responds by issuing even more money.

The cure is also well known. The government and the Central Bank have to make a firm and credible commitment to halting the rapid growth in the amount of money. This requires a combination of monetary reform and fiscal reform, since the government will have to find an alternative means to fund its expenditures. In the case of Zimbabwe it would be best if the country were to be temporarily put under the governship of an external, international body of government.

Sadly for the people of Zimbabwe, at the moment, there is no end in sight yet to the country’s political and economic chaos. Thursday April 4 the Central Bank introduced yet higher denomination bank notes of ZWD25 million and ZWD50 million.

Update: 16 May the Central Bank introduced bank notes with a denomination of ZWD 500 million. And no end in sight. The effects of hyperinflation at this scale are as profound as a natural disaster. But because it doesn't happen with a bang, it goes unnoticed.

Update 2: 22 July the Central Bank introduced bank notes with a denomination of ZWD 100 BILLION. And still no end in sight. And Mugabe still in power. And the world watches on (or looks the other way).

Zimbabwe in facts and figures