The futility of trying to put a number to Zimbabwe’s hyper-inflation
Posted by CM on December 10, 2008
Zimbabwe’s current astronomical and rising inflation rate will provide years, decades worth of study for scholars. But the over-riding concern now is the way an inflation rate said to be in the millions percent makes hour-to-hour survival a huge struggle for ordinary Zimbabweans.
But it can also be examined as a sort of sad but fascinating, incomprehensible game. And The Zimbabwe Crisis provides all sorts of opportunities for people of all types to sell their ‘expertise.’
A case in point is the silly game of trying to pin down what exactly Zimbabwe’s rate of inflation is. Obviously if an ‘expert’ is asked, s/he can not give the most honest answer and say, “Prices are changing so rapidly, so variably and so unpredictably it is impossible to say what Zimbabwe’s inflation rate is with any certitude.” Or even merely reliably, even with a very large standard deviation. I might add that it is a mostly meaningless exercise anyway.
But that doesn’t stop some people from trying. Newspapers need copy every day and today’s Zimbabwe provides some of the most colourful. And there is no shortage of “experts” who are happy to be quoted by the media. Builds up the consulting CV.
The Guardian (UK) had a story recently about the present cholera epidemic. The report wandered over from discussing hospitals and disease to tackling inflation.
Money is a complicated business in Zimbabwe even if most people do not have much. Cash has been in desperately short supply because the government cannot print fast enough to keep up with hyperinflation. Officially inflation stands at 231m percent, but that was in July. Since then the central bank has regarded economic statistics as a state secret.
John Robertson, one of Zimbabwe’s most respected economists, has accurately estimated the rate of inflation in the past. He says it shot through the billions, trillions and quadrillions between August and October until it reached 1.6 sextillion percent last month. A sextillion has 21 noughts.
Robertson says the number is almost meaningless. “Inflation at the present rate is academic. Nobody says they’ll increase salaries on this figure. It’s impossible to work with it.”
An interesting piece of diversion from the reality of what the levels of hyper-inflation mean for Zimbabweans just trying to get by from day to day.
I grinned at the reporter’s judgment that his quoted source had “accurately estimated the rate of inflation in the past.” If it was an estimate, how then could it also be accurate? Besides that nit-picking detail, who adjudged the ‘accuracy’ of the source’s previous guess? On what basis?
Despite the reporters awkward attempt to put a plug in for his source’s reliability, at least the source was honest enough to admit that Zimbabwe’s rate of inflation is so high that the numbers being bandied about, likely including his, are completely meaningless.
Besides knowing that price increases have astonishingly got out of control in Zimbabwe, no one has the slightest clue what the rate of the change is. People like John Robertson might just protect their reputations if they learned that sometimes when reporters come calling it is better to just say, “no comment.”