When inflation sets in, many Third World countries will not be able to handle it. They are already considered poor nations but cost of living is rising daily.Zimbabwe's economy has been spiralling downwards with no signs of any potential economy comeback.
Inflation rose from few hundred per cent up to an impossible rate of two hundred thirty one million per cent (231,000,000%). Many people will not be able to comprehend what kind of inflation is this. In layman example, a loaf of bread that was sold at 100 Zimbabwe Dollar in year January 2007 is now sold at 23,100,000,000 (that's hitting above Twenty Three Billion Zimbabwe Dollar).
The country tried to print bigger currency denomination to counter the increasing rate of inflation but to no avail. Then it changed the currency valuation by deleting the number of zeros. Is that the correct way to handle the economics? Whoever that gave this advise is really marvellous. Were they graduates from Cambridge UK or MIT, USA? Or local politicians that graduated from their local universities?
Hence, it decreases the value of the currency and on a positive note, it helped the citizens in the way of carrying lesser currency notes when they go for shopping. Effective Aug 2008, from the height of a 100,000,000,000 Zimbabwe Dollar (One Hundred Billion) currency note that equates to less than USD400.00, it now becomes 10 Zimdollar (at a rate of Z$10 billion = 1 Zimdollar).
As root of inflation was the political instability, inflation rate continued its climb. The nation needed to print bigger currency denomination notes again. Firstly, the 10,000 Zimdollar and now 20,000 Zimdollar (equivalent to US$20). You could only withdraw the maximum of 20,000 Zimdollar from your bank account ...... daily!It will be neverending and by early next year, the 100,000 Zimdollar will be out on the street. By then, I would have lost count of the number of times it has printed new notes. Next level of inflation rate? This African nation is really one of a kind with the leaders in power, who are living in posh lifestyle, not considering the suffering citizens.
Reading: Zimbabwe inflation hits new high - BBC News/Africa
Related posts:-
* Zimbabwe's Growing the Wrong Way
* Just How Much is 500 Million Dollars?
Tags: Zimbabwe, Zimbabwe Dollar, Zimdollar, Economics, Inflation, Africa
6 comments:
omg! how do they handle it.. thats crazy inflation!
Whao, Unimaginable! Damned bloody government! Hope Malaysia is not going to be like this one day...
very informative. I learn something new today. Thanks!
economic crisis is heating not just 3rd world countries but even the 1st world..
sheesh...pity the Zimbabwians!! It's like Indonesia; yeah and i really hope Malaysia won't be foolish enough to listen to so-called "financial advisors".
cbenc - they can't handle and ard 80% cld be in poverty level
chemhoster - zimbabwe's economy is out of control bcuz the govt thinks its still ok
eiling - will send u the bill in due course hehe
kittykat - true as most of the working folks have not dealt with stagflation economy before
kevin - provided our govt is serious in implementing stringent measures
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