Since the Covid pandemic, much has been made about spiralling inflation. Although crossing 10% is seen as a huge red flag for an economy, that is nothing compared to hyperinflation, defined as inflation that exceeded 50% monthly.
These are five cases of hyperinflation from across the world, from war-torn nations in Europe to modern dictatorships in the third world.
Germany
The most infamous case of hyperinflation occurred in Nazi Germany in the early 1920s.
As a result of Treaty of Versailles policies post-World War One, Germany was mounted with crushing debt while it lost a significant quantity of land and of its population. By 1920, the German exchange rate against the dollar was 16 times less than it was pre-war while prices had increased by 700% in 1922.
In 1923, Germany’s gloomy economic situation was worsened by the French occupation of the industrial Ruhr region. When nations refused to allow Germany to repay in goods such as coal and steel but with money, the government resorted to reprinting paper marks, which caused inflation to soar.
1923 also marked the worst of the crisis, with images of Germans carrying wheelbarrows of marks a now-famous snapshot of the economic mire. Workers had to spend cash immediately before its value plummeted further while others used the paper as fuel as it was cheaper than firewood. 750,000 public sector jobs where loss whereas starvation, diseases, and looting became widespread.
By November, one dollar was equivalent to four trillion marks. One famous example used to indicate the scale of the crisis is that a newspaper costing one mark in May 1922 cost 100,000 by September 1923; by November, it cost 700 billion marks.
This crisis was finally tamed under Chancellor Gustav Stresemann, with future Reichsbank President Hjalmar Schacht helping introduce the new rentenmark currency to replace the mark, with one rentenmark equalling a trillion old marks.
Thereafter, Germany’s economy – largely propped up by the United States under the Dawes Plan – entered its so-called “Golden Years” (1924-1929) where it became the biggest economy in Europe and the second biggest in the world.
Zimbabwe
The most famous case of hyperinflation in modern history is that of Zimbabwe, whose inflation peaked at 500 billion percent with a year-on-year inflation rate of 89.7 sextillion percent.
November 2008 was the height of Zimbabwe’s hyperinflation, with prices doubling every day and the monthly inflation rate standing at 79.6 billion percent. One US dollar was equivalent to $2,621,984,228,675,650,147,435,579,309,984,228 (two octillion Zimbabwean dollars).
President Mugabe’s anti-colonial land grabs are often blamed for igniting spiraling inflation as poor, untrained black farmers had taken over from richer white landowners which had a catastrophic effect on Zimbabwe’s food supply.
In response, like in Weimar, Zimbabwe kept continuously reprinting money as well as continual borrowing though high-profile bankers and officials blamed it on international sanctions.
At the height of the crisis, the Reserve Bank of Zimbabwe even issued a $100 trillion bill. Even that could not buy a loaf of bread.
The human cost of Zimbabwe’s hyperinflation is astounding. The New York Times noted that “the people of this once proud capital have been plunged into a Darwinian struggle to get by”, further noting how a month’s salary for a teacher could not buy two bottles of cooking oil while a doctor’s salary was less than four day’s bus fare.
Unemployment stood at 94% while four-fifths of the country were living on less than the equivalent of £1 a day. Half of the country became chronically malnourished as funeral services failed to keep up with demand.
In 2009, Zimbabwe dropped its own currency, allowing foreign money to become legal tender. By 2016, 90% of transaction were in US dollars.
The economic road never has run smoothly in Zimbabwe since, with the nation becoming the most deflationary in the world afterwards before readopting its own currency, raising concerns as its inflation rate again soared, reaching up to 667%.
Hungary
Zimbabwe’s case is only dwarfed by the worst hyperinflation crisis: Hungary in 1946.
Though far less famous than either Germany or Zimbabwe, Hungary’s post-war crisis saw prices doubling every 15 hours at its peak in July 1946.
After the Second World War, Hungary was in a state of total disrepair.
As Hungary became a battleground between Germany and the Soviets, much of its infrastructure was bombed. According to Hungarian historian László Borhi, 70% of Budapest’s buildings were destroyed and $4.5 billion was wiped out (for comparison, by 1947, Hungary had a national income of $1.2 billion).
This economic shock caused workers to lose 80% of their capital, its wealth had been slashed by 40%, and the Nazis departed with the nation’s gold reserves. Moreover, the country was forced to pay extortion reparations to the occupying Soviets, further crippling the economy. Some have seen the state-sabotage of the Soviets as a deliberate attempt to eradicate the bourgoisie of Hungarian society.
The lack of a functional taxation system meant that the only way to make money was printing money. Around 90% of renew was produced this way, feulling inflation.
Anecdotes of the scale of economic turmoil signal the struggles for everyday citizens. One infamous story from 1946 goes that the Hungarian poet Gyorgy Faludy was paid 300 billion pengo for some of his writings (a sum that would have been $60 billion prior to World War Two), which was only enough to buy some chicken, two litres of cooking oil, and some vegetables.
The figures speak for themself. By the peak, the daily inflation rate reached 207% while prices rose by 41.9 quadrillion (41,900,000,000,000,000%) in one month.
At one point, the government introduced the 100 quintillion (1 followed by 18 zeroes) bill, the largest denomination bill ever issued.
In August 1946, the problem was resolved by the introduction of the new forint currency to replace the pengo. One forint was tied to the value of 400,000 quadrillion pengos.
By the time of the currency’s end, the nation’s entire supply of pengo amouted to 1/1000 of one US cent.
Yugoslavia
Hungary’s issues in 1946-47 were not the only Soviet bloc nation to face economic turbulence after a major war.
Only, this time, it was Yugoslavia (later Serbia and Montenegro) who suffered hyperinflation after both the Cold War and civil wars.
For two years from 1992-1994, Yugoslavia was caught in a long-running hyperinflation crisis which peaked at a daily inflation rate of 62% and a monthly peak of 313 million percent.
Though President Slobodan Milosevic blamed the crisis on UN sanctions, it was caused by several factors such as civil wars, deficit spending, and printing money (by December 1993, 95% of money was made through printing and 80% of it spent on the military). In addition, according to Steve Hanke, Milosevic had issued $1.4 billion to allies, amounting to more than half of all money the National Bank planned to credit.
The crisis led to a breakdown in living standards as unemployment reached 25%, wages fell 50%, and pension payouts could not buy even one German deutsche mark. Amid the hyperinflation, the German DM became the unofficial currency for everyday purchases. Against the DM, one German deutschmark equalled three trillion Yugoslavian dinars by the end of 1993.
Several attempts to revalue the currency failed. According to Milica Stojkovic, in December one December 1993 revaluation meant the currency lost 97% of its value in one week.
After reaching 116.546 trillion percent in inflation by January 1994, a final new dinar, backed by gold reserves, managed to stabilise the currency.
Venezuela
In the most recent instance included in this list, Venezuela officially entered the stage of hyperinflation in 2017 when prices crossed the 50% threshold.
By its peak in 2018, the annual inflation rate was 1,300,000%.
Several factors meant that the crisis only worsened, even when the warning signs were clear.
For example, the collapse in oil prices harmed the nation who, as a so-called petrostate, are highly reliant on the fossil fuel. Oil accounts for over three-quarters of the nation’s exports and about a quarter of the nation’s GDP. This industry has been particularly hit by international sanctions, with the Washington Office on Latin America estimating oil sanctions estimating a loss of up to $31 billion annually.
Another is the government’s wreckless spending, blowing a massive deficit in the nation’s finances and burying them in debt. Government expenditure was notably higher than any money they could hope to raise in revenue from taxation.
Moreover, as with the cases above, the government kept printing money, with the supply expanded by as much as 30% a month, driving up inflation further.
What followed was the worst economic crisis in modern history outside of war, revolution, or state collapse, with the economy contracting by 61% in per capita terms.
The nation’s central bank estimated that the rate of inflation increased by 53,798,500% between 2016 and 2019.
At its peak, prices were rising by 219% a month, doubling every 18 days. In 2019, prices peaked at 400,000% a year.
For the first time in 20 years, gas prices rose, increasing by 6,200%.
Many anecdotes exist, illustrating the crash in living standards over the last decade or so.
According to the Economic Observatory, living standards plummeted by 74% between 2013 and 2023. Since 2014 (when Venezuela’s 69% inflation was already the highest in the world), 7.7 million Venezuelans – comprising a quarter of the nation’s population – have fled.
The BBC noted that six out of ten Venezuelans said they went to bed hungry as they could not afford enough food while the average person lost 25 pounds in 2017.
By 2020, the IMF noted that employment stood at 50%.
In terms of pricing, a coffee from a bakery rose from 0.45 in the new currency to 1,700 bolivars (170,000,000 in old bolivars) in 2019, the Guardian noted that a chicken worth $2.22 would cost 14 million Venezuelan bolivars, and that the 18,000 bolivars monthly minimum wage was the equivalent of just $5.50 less than a McDonald’s Happy Meal.
So, how did the government deal with the problem? Well, some might say they still haven’t.
Dictator President Nicolas Maduro blamed the crisis on western “imperialists” for their sanctions and economic warfare against the nation. He did however, abruptly take the 100 bolivar notes out of circulation, blaming organised crime for hoarding the notes.
Between 2018 and 2020, the government adhered to a more restrictive economic policy, slashing public services from 48% to 10%.
By 2019, the old currency had lost 99% of its value, hence the replacement with a new bolivar pegged to the government’s petro, though this failed. In 2022, 50% of payments were made using US dollars.
Post-Covid, the nation has escaped hyperinflation but struggled to yet bring its currency under control, with 2025 seeing three-digit inflation figures – a holdout from its decade of fighting mind-boggling prices rises.
GRIFFIN KAYE.
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