top of page

Biggest hyperinflations in the history

Updated: Feb 7

Varban Boev is the author of the article titled : Biggest hyperinflation in the history

Author: Varban Boev

Publication date: 02.08.2023

hyperinflation in old currency

Hyperinflation is an extreme economic phenomenon characterized by rapidly rising prices and the devaluation of money. In fact, this devastating situation typically occurs when the money supply increases drastically without corresponding economic growth.

The first recorded instance of hyperinflation occurred during the French Revolution, where monthly inflation reached a peak of 143%. However, such uncontrollable inflation didn't resurface until the 20th century. In 2008, economist Steve Hanke studied hyperinflation in Zimbabwe and compared it to other historical cases.

What’s more, throughout the 20th century, there were 17 cases of hyperinflation in Eastern Europe and Central Asia, 5 in Latin America, 4 in Western Europe, 1 in Southeast Asia. Let’s take a look at some of them.

Greece, October 1944

In Greece during October 1944, prices doubled every 4.3 days, and inflation skyrocketed to 13,800% that month, followed by an additional 1,600% in November. The situation worsened due to the Second World War, which burdened the country with debt, disrupted trade, and led to four years of occupation. As a result, the increase in money supply, tax revenue decline, and soaring war spending caused Greece's finances to spiral downward.

Germany, October hyperinflation 1923

In Germany, during October 1923, monthly inflation reached a staggering 29,500%, with prices doubling every 3.7 days. Hyperinflation was a significant issue in the final years of the Weimar Republic. However, the German mark depreciated rapidly after the country abandoned the gold standard in 1914 to finance its war efforts. They did it through loans rather than tax revenue.[1] Afterwards, the post-war reparations and occupation of the Ruhr Valley further exacerbated the crisis.

In general, both cases illustrate the devastating consequences of hyperinflation, where citizens experienced a complete loss of purchasing power.

hyperinflation in Yugoslavia currency

Yugoslavia, January 1994

The Yugoslav dinar experienced hyperinflation during the period 1993-1995, with prices rising by a mind-boggling 313 million percent in January 1994. This equates to 64.6% daily inflation and prices doubling every 34 hours. Afterwards, the Deutsche Mark unofficially replaced the dinar, even after the government's revaluation efforts.As a result, the country's currency became increasingly unstable. Yet the reasons for that were regional conflicts, economic crises, and poor governance.

Zimbabwe,November 2006

Zimbabwe faced one of the most recent and severe cases of hyperinflation in November 2008, with a monthly inflation rate of nearly 79 billion percent. Prices in the country doubled almost every 24 hours, leading to an absurd issuance of ever higher denomination notes. The situation worsened to the extent that shops refused both the local currency and the US dollar. Also, South African rand became the unofficial means of exchange. Eventually, Zimbabwe's central bank intervened, revaluing the currency and tying it to the US dollar.

The root of Zimbabwe's hyperinflation problem lay in the early 1990s when President Robert Mugabe's land redistribution policies disrupted farming. This caused food shortages and drove up prices. By 2006, Zimbabwe had printed an astronomical amount of currency to repay loans to the IMF, exacerbating the economic crisis. What’s more, severe shortages of food, fuel, and medical supplies added to the country's woes, leading to hyperinflation surpassing 115,000% by the end of 2007.

As the situation deteriorated further, Zimbabwe's currency continued to lose value, and the country's economy shrank considerably. In 2008, the 50 million Zimbabwean dollar bill was exchanged for a mere $1.20. Eventually, the government even faced a paper shortage to print money. The hyperinflationary spiral was only halted when the central bank tied the currency to the US dollar and imposed strict measures. Unfortunately, the damage to Zimbabwe's economy and trust in its currency had already been done.

hyperinflation in historic photo

Hungary, 1946

The most extreme case of hyperinflation in history occurred in Hungary during the first half of 1946. At its peak, monthly inflation reached a staggering 13.6 quadrillion percent, with prices doubling every 15.6 hours. The situation was so dire that Hungary had one hundred quintillion pengos in circulation, rendering the currency practically worthless. To cope with hyperinflation, the government introduced a special currency for taxes and postal payments.The exchange rates of this currency are determined daily over the radio.

In particular, the root causes of Hungary's hyperinflation lay in a combination of economic woes, including the impact of the Great Depression. The central bank devalued the currency to cover its expenses, resulting in a loosening of fiscal and monetary policies. By the time World War II began, Hungary's economy was already in a precarious state, and the government-controlled central bank resorted to printing money. This was without any financial constraints to meet the budgetary needs.

The hyperinflation was so severe that even coins disappeared from circulation as their metal content became more valuable than the coins themselves. In an attempt to stabilize the situation, Hungary introduced measures. Yet the only effective solution was the introduction of a new currency, the forint.

The Hungarian hyperinflation serves as a cautionary tale, highlighting the devastating consequences of unchecked money printing. Also, it showed the importance of sound fiscal and monetary policies to maintain economic stability.

In conclusion, such extreme hyperinflationary episodes demonstrate the necessity of prudent financial management and responsible governance. These measurements safeguard the value of a nation's currency and protect its citizens from economic turmoil.


You can also read about:


Reference List

● The worst cases of hyperinflation in the world

● Cases of catastrophic hyperinflation

10 views0 comments


bottom of page