Zimbabwe inflation now over 1 million percent

Source: Associated Press

Weary Zimbabweans are facing a new wave of price increases that will put many basic goods even further out of their reach: A loaf of bread now costs what 12 new cars did a decade ago.

Independent finance houses said in an assessment Tuesday that annual inflation rose this month to 1,063,572 percent based on prices of a basket of basic foodstuffs. Economic analysts say unless the rate of inflation is slowed, annual inflation will likely reach about 5 million percent by October.

As stores opened for business Wednesday, a small pack of locally produced coffee beans cost just short of 1 billion Zimbabwe dollars. A decade ago, that sum would have bought 60 new cars.

And fresh price rises were expected after the state Grain Marketing Board announced up to 25-fold increases in its prices to commercial millers for wheat and the corn meal staple.


Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2008/05/20/international/i032056D13.DTL&tsp=1

And $815/gal at the end of the week.

i've never visited that country for obvious reasons but when you hear these stories i can't figure it out

most people living there surely never had anything to begin with, so who is going to buy the milk at all, the farmer or the farmer's family surely must end up consuming it themselves

or perhaps there is barter for items and no cash changes hands at all?

i've been in a country (madagascar) so poor that i never saw a coin, except once, because the coins had no value -- but the prices seemed somewhat stable and in theory someone could save up and actually buy a chicken or a cup of espresso or something

it just seems at some point with inflation at such a rate that no business could be transacted at all

i guess i'm saying i don't believe anyone actually paid $116 a gallon for a jug of milk, i believe they either traded for it directly without use of money or have already left the country

so i think, past a certain point, these prices have no meaning because no one has actually paid them, how would you even physically get your hands on a billion z-dollars to pay for the can of cheap coffee? it couldn't be done

The government just prints more money in larger and larger denominations. Printed money has expiration dates in order to try and artificially shrink the money supply. In the black market people use forex where they can. Starvation is rampant, millions have left.

You're right: no business is transacted at all. What little 'business' exists is either a government con job set up to look like business, or it's a business that serves the wealthy elite alone, and thus is permitted to operate on forex and not Zim dollars.

They just released the $500,000,000 zim note and will soon be releasing $5,000,000,000, $25,000,000,000 and $50,000,000,000 bearer checks.

The money is worth more burnt as fuel.

Prices go up as raising something to a power - if, say, inflation was 100% for 2 years running, that would mean something cost 1 unit at the start of the first year, 2 units at the start of the second, and 4 units at the start of the 3rd.

1,063,572% per annum means something that cost 100 'units' at the start of the year cost 1,063,672 units at the end. So, to find the inflation each day, you take the 365th root of 10,636.72 - which is 1.0257. So the daily inflation rate is just 2.57%. Monthly, it's 117% inflation. Weekly, 19.5%.

So the $4 milk would cost $4.10 by the end of the day. And after a week, $4.78.

It's been a while :P

I made two mistakes. The big one I didn't even think about was that I had the bloody 'units' wrong!

Too much time doing logic control and not enough doing math!

I'm embarrassed. :blush:

Beat me to it lol!

Inflation is compounding, so you can't simply divide the annual rate by a number of days to get a daily rate. 102.555555 to a power of 365 is 10,000, which is exactly the factor by which prices would rise at 1,000,000% inflation annually. Sorry, just a nit-picking economist here. In a single week, prices would rise 19.3% from the beginning of the week. In 30 days, prices would rise 113%. The exponential compounding effect is what gets it to 1,000,000% over 365 days.

when i was in j'burg, one of my guides told me that there were 5 million refugees zimbabweans just in that city and surrounding areas -- i'm not even sure he was confident of a correct number but you could see the place was huge, huge, huge and the population maybe not correctly census'd-- another guide guessed at maybe 16 million people total living in the greater j'burg area, including the many many refugees

obviously people can't pay one billion whatevers for a can of coffee, at some point they are left with no options other than fleeing to south africa or elsewhere for a new life

What form of failed state allows 1 MILLION % inflation rate ?

Were they not a model worth bragging about a year ago ?

the border seems to be fairly porous and south africa is by far the richest country in the region, i think the next richest would be kenya(!) which does not share a border with zimbabwe (altho people walk across from tanzania all the time) and which is not really in the same economic category as south africa anyway

i can't find recent population figures but they've had a significant decline in population first to hiv/aids and now to emigration to other countries

probably my guide exaggerated but if there are really 5 million refugees in j'burg area that's probably half or almost half the previous population of zimbabwe as it is...

in the US? This is what the neo-liberals/neo-cons do, they do a run like this on a country who will not prescribe to WTO or IMF policies. It's the only thing I can really think of as to why the inflation rate would be this high.

I agree on the barter, who in the heck can pay that? Are cows and/or goats and chickens that scarce that you have to PAY for the meat, milk and eggs?

cronies have ransacked the country and destroyed it politically and economically.

Germany. In the 1930's.

that gave rise to a fascist state after getting their asses handed to them with WW I reparation payments to the victors.


unless.....
Does Zimbabwe have beer gardens?