Renowned American economist and expert in applied economics, Steve Hanke, has issued a grave warning that Zimbabwe teeters on the precipice of yet another episode of hyperinflation.
As of June 7, 2023, Hanke’s recent estimations indicate that Zimbabwe’s monthly inflation rate has skyrocketed to a staggering 102%. Alarming as it is, he further cautions that if this rampant inflationary trend persists, Zimbabwe could plunge into hyperinflation within a mere five days.
This African nation has previously endured the ravages of hyperinflation, notably in 2008, when the economy was thrown into disarray. Presently, Zimbabwe finds itself grappling with a dire economic situation, where certain retailers are unabashedly pricing a loaf of bread at an exorbitant ZWL 12000.
Professor Hanke’s ominous warning underscores the urgent need for Zimbabwe to promptly take decisive measures to stabilize its economy and address the underlying issues fueling the inflationary crisis. Failure to do so could unleash severe consequences upon the populace, as hyperinflation wreaks havoc on both the economy and the general welfare of the people.
During the catastrophic hyperinflation episode of 2008, Zimbabwe witnessed one of the most severe cases in history, with estimated annual inflation peaking at a mind-boggling 500 billion percent, as reported by the International Monetary Fund. Although the current price hikes predominantly affect commodities priced in the Zimbabwe dollar, some businesses have also resorted to raising prices in United States dollars.
Recalling the harrowing events of 2008, businesses resorted to removing essential commodities from their shelves to avoid incurring losses, as the Zimbabwe dollar rapidly plummeted in value against other currencies.
In response to the escalating crisis, the government has implemented a series of measures aimed at stabilizing the macroeconomy and curbing the depreciation of the local currency. Regrettably, there is a dearth of evidence indicating the effectiveness of these measures thus far, leaving the nation in a state of uncertainty and apprehension.