The benchmark for the success of a country's economy can be seen from the economic stability of the country concerned. One indicator that can measure stability is through the inflation rate.
Inflation is a condition where there is an increase in the prices of goods and services in general and continuously within a certain period of time. If inflation is unstable, it will create new problems for the community, namely they will have difficulty making decisions on consumption, investment, and production.
However, there are conditions worse than that. This condition is called hyperinflation. Launching from the Investopedia page, hyperinflation occurs when inflation continues to occur up to more than 50% within a month. The condition that can be observed is a rapid and sudden spike in prices without being matched by an increase in general income.
A country experiencing hyperinflation problems will usually find it difficult to solve it. In addition, this problem also tends to cause other problems such as disruption of political stability. Then, which country had hyperinflation? Here are some countries that have experienced hyperinflation reported from various sources.
1. Hungary
Economic instability in Hungary has actually been seen since the collapse of the Austro-Hungarian Empire. The impact of this instability was the abolition of the kronoa currency and then replaced with the pengo in 1927. But not long after that, in 1930 the Hungarian economy went into depression. Until hyperinflation occurred in Hungary for one year, from mid-1945 to 1946.
Although only in the space of a year, the hyperinflation has been recorded as the worst history in the Hungarian economy. This is due to the impact resulting from hyperinflation that occurs, namely the price of an item can increase by 190 times in just 4 months.
At that time, the government circumvented this problem by issuing a new currency called the forint (equivalent to 400.00 quadrillion pengo) and eliminating the pengo currency to control the hyperinflation that occurred. As a result, the Hungarian economy was stable from then on until the 1990s.
2. Yugoslavia
Yugoslavia had experienced hyperinflation for 2 years, from 1992 to 1994 with a daily inflation rate of 65%. This causes the price of goods to double every 34 hours. This condition is thought to be the aftermath of the war between Yugoslavia in Bosnia and Herzegovina.
3. Zimbabwe
Zimbabwe has experienced a long period of hyperinflation since 2008. The hyperinflation was the result of poor management of the country in the previous few years.
It is known, starting in 1998 Zimbabwe spent a lot of expenses for war purposes and to pay off the national debt. As a result, the inflation rate is getting out of control to date. Reporting from the Trading Economics (2022) page, the inflation rate in July reached 191.6%. The inflation rate increased 68% from June 2022.
4. Venezuela
Hyperinflation in Venezuela is a new case because it has occurred since 2016 until now. Even though it is listed as a country that has the largest oil reserves in the world, it does not seem to make Venezuela have a stable economic condition.
Causes of hyperinflation in Venezuela
The hyperinflation that occurred in Venezuela was caused by a prolonged recession, falling oil prices, foreign exchange deficits, and the food crisis. As a result of this, prices jumped by 13,000% in 2018 and this year, Venezuela's inflation rate reached 167.15%.
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