Economics

Posted on: October 25, 2006 15:15

The government of Zimbabwe faces a wide variety of difficult economic problems after having abandoned earlier efforts in developing a market-oriented economy. Current problems include a shortage of foreign exchange, soaring inflation, and supply shortages. Its 1998–2002 involvement in the war in the Democratic Republic of the Congo, for example, drained hundreds of millions of dollars from the economy.

According to official figures, inflation rose from an annual rate of 32% in 1998 to a high of 1204.6% in August 2006, a state of hyperinflation.

The exchange rate fell from 24 Zimbabwean dollars per US dollar to 250(000) Zimbabwean dollars per US Dollar (official rate) and 850(000) Zimbabwean dollars per US Dollar (parallel rate), in the same period.