Hyperinflation affects countries of all ranks at some point and in today’s time Zimbabwe is a great example of hyperinflation that has been put in effect in many accounts. Zimbabwe has been affected socially, politically, and economically and throughout this post, you will see all the different ways they are suffering and how that can impact the future.
How was Zimbabwe affected socially?
Usually, when a country or place experiences hyperinflation they go through social aspects such as tax revenues, chuttering businesses, unemployment rates rise, and drives the cost of living higher than reachable. In the country of Zimbabwe many social cues were put out of balance because according to a CFI article, it states that, “Prices in Zimbabwe nearly doubled every day – goods and services would cost twice as much each following day. With the unemployment rate exceeding 70%, economic activities in Zimbabwe virtually shut down and turned the domestic economy into a barter economy” which in the end makes it hard for people living in Zimbabwe to afford to live and succeed in a country going through hyperinflation.
These could cause many people to go unemployed while dealing with high price ranges going up while items value staying the same. This harshly affects people on a social level because many activities are shut down because of the prices and citizens not being able to keep up with the rapid movement of rates. Hyperinflation in Zimbabwe can also cause the hoarding of specialized goods which can make the supply of them go scarce making thor prices to afford them raise. This can affect the people of Zimbabwe because they can quickly hoard or use out all of their supplies and goods while hyperinflation is still on the loose.
How was Zimbabwe affects politically?
Zimbabwe’s experience which hyperinflation was caused by the monetizing of its expenses and as a result of this, several years of failed political reforms such as confiscation of agricultural properties, the GDP declined-17 percent in 2008. Basically, it all started when the Zimbabwe government introduced a series of land reforms that involved redistributing land from the existing white farmers to black farmers. However, with just a little experience, the new farmers struggled to produce food, and there was a large fall in food production. So with the failure of the politics and government, the country experienced a great downfall in food production which then lead to goods like food and crips going dry in shops meaning they were more valuable to the public eye. This continued to drag down their currency leaving them to find a new one in the future. The government then decided to increase the rate they were printing money however this lead to financial debt to the country and by printing more money, it caused more inflation towards different aspects politically. In the end, this shows however the government realized and attempted to fix the issue in Zimbabwe which resulted in more inflation as time went on.
How was Zimbabwe affected economically?
Different causes and effects of Zimbabwe’s hyperinflation also affected their economic stability in many different ways. According to the CFI article, it says that “The national government increased the money supply in response to the rising national debt, there were significant declines in economic output and exports, and political corruption was coupled with a fundamentally weak economy” which means that Zimbabwe spiraled out of control causing them to use a foreign currency such as different countries like the United States to be one. Hyperfincaltion in their country, lead the value in their current currency to lose its value making the prices for certain goods skyrocket while the importance of their money loses their value as well making it hard to live. Most of the time this causes them to abandon their currency and fic it with a new one. Over time Zimbabwe gave up the Zimbabwean dollars and found another currency of their choice to help aid the hyperinflation happening which could potentially become worldwide because of the trading each country does with each other in order to help maintain globalization.
How could Hyperinflation in Zimbabwe affect the world Globally?
I feel as if the problem in Zimbabwe wasn’t going to get fixed soon as in finding a new and different currency to help with the hyperinflation then yes it could reach other countries globally because Zimbabwe is used for trading goods, and there is a heavy scarce of that material it can reach other countries like the United States and pull them down economically as well. The value and unstable balance of certain goods can stretch across globally and heder different currencies as it has down in the past. In conclusion, yes I believe it is possible and we all need to be mindful that if a currency is not repaired of hyperinflation then it can spread rapidly across the globe.
Sources:
- https://corporatefinanceinstitute.com/resources/knowledge/economics/hyperinflation/
- https://smallbusiness.chron.com/hyperinflation-affect-economy-75620.html
- https://www.economicshelp.org/blog/390/inflation/hyper-inflation-in-zimbabwe/
- https://www.thebalance.com/what-is-hyperinflation-definition-causes-and-examples-3306097