Maravi

Zim inflation tops 2 trillion %

COMMENT - What does 'an independent assessment by the Cato Institute' mean? The Cato Institute is a right wing think tank. Also...

" The rate of 50 per cent per month is equal to a 12,875 per cent per year. Since then, inflation has soared. "

Fifty percent per month for 12 months (1.5^12) would be 129.75%, not 12,875%, or would that be 128.75%? Twelve thousand percent or one hundred and twenty eight percent? You decide.




Zim inflation tops 2 trillion %
By Kingsley Kaswende in Harare
Wednesday October 15, 2008 [04:01]

ZIMBABWE 'S annual inflation has topped two trillion per cent as at October 3, 2008, independent assessments by The Cato Institute senior fellow Professor Steve Hanke have revealed.

But the Zimbabwean government, whose latest figures are of end-July 2008, still pegs the inflation rate at 231 million per cent. Hanke is professor of Applied Economics at The Johns Hopkins University and is a senior fellow at The Cato Institute.

He is one of the world's leading experts on exchange-rate regimes and has played a prominent role in designing and implementing monetary reforms that have stopped very high or hyperinflations in eight countries.

He recently published a book on how Zimbabwe could avoid hyperinflation.
Prof Hanke has developed a formula called the Hanke Hyperinflation Index for Zimbabwe (HHIZ) which he uses to derive inflation figures on a weekly basis.
In February 2007, Zimbabwe's inflation rate had topped 50 per cent per month, the minimum rate required to qualify as a hyperinflation.
The rate of 50 per cent per month is equal to a 12,875 per cent per year. Since then, inflation has soared.

However, official inflation data is always published late and is usually outdated.
The Reserve Bank of Zimbabwe has been even less forthcoming with money supply data. The most recent money supply figures are of January 2008.

With absent current official money supply and inflation data, it has become difficult for economists to quantify the depth and breadth of the still-growing crisis in Zimbabwe .
To overcome this problem, Prof Hanke has developed the HHIZ.

This new metric is derived from market-based price data. According to Prof Hanke's calculations, Zimbabwe's annual inflation rate was 531 billion per cent as of September 26, 2008.

As of 3 October 2008, Zimbabwe's annual inflation rate was 2 trillion per cent, Prof Hanke indicates.

As inflation spirals out of control, the central bank unveiled a new Z$50 000 note on Monday, just two weeks after introducing the Z$10 000 and Z$20 000 bank notes.
A couple of months ago, the central bank chopped off 10 zeros from the Zimbabwean dollar but three are already back.

Labels: COLOUR REVOLUTIONS, INFLATION

posted by MrK @ 5:19 AM