Why hyperinflation happened in Zimbabwe?


What is Hyperinflation ? Well let’s begin with inflation. Inflation is the rate at which goods or services is rising or the rate at which purchase power of currency is falling. To understand inflation in details you can listen to Investment-Podcast. In economics term when inflation rate is beyond 50%, it is called Hyperinflation.

Country’s government earns (mostly from taxes) and spends (defense, development, education etc). In any economy Government is the highest spender by far and often their spending surpasses their income. Minor differences can be taken care of by printing money. This printing leads to inflation, which is basically devaluation of the currency. A little inflation is a good thing because it helps the economy to move and grow.

Due to corrupt government and some wrong government policies most of the Zimbabwean people became unemployed. From a food exporting country, they became food importing country. Unemployment fell up to 94% and GDP growth to -18 percent.

Listen to the podcast to understand the hyperinflation situation and to know the steps Government has taken to control it. If you have questions, please feel free to ask in comment section.

Click here to watch the educational video.


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