Inflation Nightmare

Zimbabwe long ago became an absurd horror show, its people brutalized by the dictatorship of Robert Mugabe, a deep economic slump, and hyperinflation.

Or should we say hyper-hyperinflation? The official inflation rate of this African nation has gone beyond surreal. The inflation rate in June, was pegged at 11.2 million percent, up from 2.2 million percent in May.

"It gained 9,035,045.5 percentage points from the May rate of 2,233,713.4 percent," state media said today, the BBC reports, quoting the Central Statistical Office.

Despite that apparent degree of precision in the official figure, economists say it severely underestimates inflation in the country.

"The actual figure could be high as 40 million percent in June," John Robertson, an independent economist, told Agence France Press. He added that the figure for August could be 600 million percent.

Hopes for any improvement in the economy rest in a possible power-sharing deal between Mugable and the political opposition. But that has so far proved elusive.

One may ask why the government even bothers calculating monthly inflation, when it is a runaway bullet train. For one month last year, it did not, because government officials could not find enough goods on empty store shelves to check prices.

The government has taken one decisive action. At the beginning of the month, it revalued 10 billion Zimbawean dollars to one dollar.

The move echoes the one taken by the German central bank of Weimar republic, when 10 billion old marks became one new rentenmark. The inflation of Zimbabwe is fast approaching the rate of 1920's Germany.

(For a slideshow on the effects of inflation in Zimbabwe, click here.)

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