THE Zimbabwe economy

This report will address what Zimbabwe is currently experiencing of an inflation rate of over 7600% per annum. The crisis started in 2000 when the Zimbabwean government effectively bought farms and  displacing farmers from their lands then distributed the land to people who are close to Mogabe. Thus Leading Zimbabwe’s economy immediately into recession and inflation began to rise.
Just like everyone else the Zimbabwe people were suddenly faced with the crisis of having to pay much more for things, and they didn’t have enough because there was a decrease in output of the farms and agriculture products due to the polital corruption, so the Goverment started printing more money to cover it. Thus lead the Country to enter Hyperinflation based economy what happened worsen th esituation when Zimbabwe’s Reserve Bank  has been ordered by Mugabe  to print amounts of currency that grow the money supply at a rate well over Zimbabwe’s inflation rate. He also stated recently that Zimbabwe will continue this practice of printing more currency as and when required. printing more money cause hyperinflation which meant money supply is increased without taking an account of the overall economy of Zimbabwe and it eventually lead the currency to devalue. In plain economy if the supply of money increases above the inflation rate, it means the rate of inflation increases too. The Zimbabwe goverment has been printing trillions of local currency at a time when their economy is declining. In addition to that to worsen the situation Mugabe has imposed on traders to fix their prices had led the economy to contract and get worse because there was little demand on the supply and increase in cash flow circuling the country. If money supply growth is stopped and the goverment did stop printing money, people simply won’t have enough currency to buy anything anymore. if they are really to fight thi hyperinflation they should follow the footstep of Bolivia when they faced this situation