Thursday, May 29, 2008

10 nations with highest inflation

Courtesy "The Economist".

The Indian people and the government are both quaking with fear with inflation hovering at around 8%. The people can barely make two ends meet with prices soaring, and the government knows that if prices don't fall, the government will.
But India is not the only nation grappling with rising inflation. The entire world is. So which are the nations with highest inflation rates? Read on.

1. Zimbabwe: 355,000%!

The inflation in Zimbabwe for the month of March 2008 rose to 355,000%! Yes, 355,000 per cent! It more than doubled from the February figure of 165,000%.
Economists say that it is a miracle that the Zimbabwean economy is still surviving and prices have been rising to unprecedented proportions. Inflation surged between February and March following the sudden rise in money supply that flooded the economy to finance the 2008 elections. Apart from this food and non-alcoholic beverages continued to drive up inflation.
Almost 80% of the nation is unemployed. The Zimbabwean central bank has introduced $500 million bearer cheques (or currency notes) for the public, and $5 billion, $25 billion, $50 billion agro-cheques for farmers. Just last fortnight the nation had introduced $250 million bearer cheques.
A sausage sandwich sells for Zimbabwean $50 million. A 15-kg bag of potatoes cost Zimbabwean $260 million. But then, Zimbabwean $50 million is roughly equal to US$ 1!


Image: A Zimbabwean man holds up a new $500-million note on May 16, 2008 in Harare. | Photograph: Desmond Kwande/AFP/Getty Images

2. Iraq: 53.2%

War-torn Iraq is also facing a huge problem, not only on the political front but also on the economic one. Inflation in Iraq is running amuck. It currently stands at 53.2%.
Rising oil prices, political instability, terrorism and the other post-conflict dynamics have led to inflation in the nation rise to unmanageable proportions
Some hurried counter-by the Iraqi central bank to curb inflation too have added fuel to the fire.

Image: An Iraqi money changer holds a handful of Iraqi currency in central Baghdad. | Photograph: Sabah Arar/AFP/Getty Images

3. Guinea: 30.9%

Guinea is also one of the world's poorest countries. The inflation in the nation is at 30.9%.
Although blessed with rich mineral wealth -- with huge iron ore, gold and diamond deposits -- Guinea has been languishing as one of the poorest nations on earth with large-scale unemployment, lack of industry and infrastructure dogging it.

4. San Tome and Principe: 23.1%

The mainstay of the economy of San Tome and Principe, an African nation, is agriculture. The main export from the nation is cocoa. It also exports coconut, coffee, etc.
The current inflation rate in San Tome and Principe is at 23.1%.
The country does not produce enough to meet domestic demand and thus is forced to import some essential commodities. With prices of food and other essential items rising in the global markets, imports for the nation have become almost unsustainable, leading to high prices and inflation.
The nation has undertaken myriad measure to reform the economy, but it is still early days and the results of liberalisation will only be noticeable over a period of time.

5. Yemen: 20.8%

Yemen is going through terrible times. The Yemini economy is experiencing an inflation rate of 20.8%.
More than 87% of Yemenis live for less than $2 a day. About 52% of children less than 5 years old suffer from malnutrition.
Most of the people are engaged in agriculture, followed by the services and infrastructure sectors, while unemployment is rampant at 35 per cent.

6. Myanmar: 20%

Myanmar is one of the world's poorest nations. It has suffered immensely under military rule for decades and has been categorised as one of the 'least developed countries' in the world by the United Nations. Its inflation rate is at 20%.
The economy of Myanmar is mostly controlled by the military junta leaving little room for private entrepreneurship or growth.
The military regime has also decided to do away with all reforms suggested by economists, throwing the nation's economy into further turmoil.

7. Uzbekistan: 19.8%

Uzbekistan is slowly moving from a somewhat closed to a market-based economy. The economic reforms have helped achieve some growth, but not nearly as much as the nation would ideally like to enjoy.
Also, lack of infrastructure, tight state control over the economy, occasional skirmishes with neighbouring nations, and an unstable political environment have seen inflation rise sharply here. The nation's inflation rate is at 19.8% currently.

8. Democratic Republic of Congo: 18.2%

Global investors do not feel that the Republic of Congo has a foreigner-friendly investment environment as it does not offer any incentive to the investor. Added to that a disorganised yet costly work force, high electricity costs, irregular supply of raw material, occasional civil unrest, political instability have only added to Congo's woes.
And even as the nation grapples with its myriad problems, the Congolese economy has been going from bad to worse. And its current rate of inflation is 18.2%.



9. Afghanistan: 17%

Afghanistan has long been a theatre of conflict and that has affected its economy adversely. Perpetual battles, an environment of fear, lack of infrastructure, industry and services has led to a once-proud nation turn into one of the world's poorest. The inflation rate in Afghanistan is at 17%.
The influx of billions of dollars of international aid has not really helped the economy much, although it is supposed to be much better now than it was in 2002

10. Serbia: 15.5%

Serbia's fragile economy, which mostly rests on agriculture, services and some manufacturing activity, has been going through a reform process for a long time. However, economic sanctions that were imposed on the nations in the 1990s have hit Serbia's economy so hard that its myriad economic problems continue to this day.
Unemployment is rampant, foreign investment is down to a trickle, foreign exchange reserves are low, and political instability are keeping good projects from taking off.
Although the nation is growing at a robust pace, the rising inflation -- currently at 15.5% -- is hurting the Serbian economy.

Labels: , ,