Located in southern Africa, Zimbabwe is a state famous for its economic problems. After a very good economic period during the 1980s and 1990s when Zimbabwe recorded strong economic growth each year, the country’s economic situation turned bad during the Congolese war.
The implication in the Congolese war between 1998 and 2002 had huge implications upon the Zimbabwean economy. The financial resources of the country were drained by the war and the country started to fall apart.
In 2000 the economy started to decline with a continuously increasing rate. In 2000 the economy has diminished with 5% but in just few years the negative growing rate reached over 18%. The whole economy was in chaos, the agriculture, exports and tourism being the most affected. At this point the inflationary spiral started to accelerate reaching incredible rates.
In 1998 the annual inflation rate was estimated at 32%, which is extremely high to a normal economy. Ten years later, in 2008 the annual inflation rate was estimated at an unbelievable rate of 11,200,000%. In November 2008 the prices doubled every 1.3 days and unofficial statistics estimated for Zimbabwe an inflation rate of more than 500,000,000,000,000,000%.
In order to keep up with the need for money, the national bank introduced new banknotes of Z$50 billion, Z$100 billion, Z$100 trillion. In 2009 the central bank announced a huge denomination cutting off 12 zeros. The new banknotes have the following values: Z$1, Z$5, Z$10, Z$20, Z$50, Z$100 and Z$500.
In 2009, trying to fight the excessive inflation, the authorities permitted the use of other currencies like United States Dollar, Euro, Pound Sterling and South African Rand, beside the Zimbabwean dollar. This decision appears to have positive effects and the inflation rate seems to ease up. No one knows for sure what the future will bring in Zimbabwe, but at least now there is a hope for the better.