Hungary holds the distinct honor of recording the most extreme monthly inflation rate in the 20th century. In July 1946, it experienced a post-World War II hyperinflation of 41.9 quadrillion percent (41,900,000,000,000,000 percent), amounting to prices doubling every 15.3 hours.
Zimbabwe broke Hungary’s hyperinflation record in November 2008 with a rate estimated at 79,600,000,000 percent per month, with the year-on-year inflation rate reaching an astounding 89.7 sextillion percent.Sextillion is a number equal to 1 followed by 21 zeros. This resulted in an incredible exchange rate of one US dollar fetching more than two billion Zimbabwe dollars, or Z$2,621,984,228 to be exact.
If you were charting the global economy in the time of the pandemic, you would know that countries around the world are currently dealing with a worsening cost of living crisis. Although no country is on the verge of posting hyperinflation similar to the two examples mentioned, inflation rates are accelerating to record levels worldwide.
Consumer prices in Turkey soared 73.5 percent in May from a year ago, hitting a two-decade high, according to official figures.Critics blamed President Recep Tayyip Erdoğan’s reluctance to raise interest rates, a common tool used to help cool surging prices, for Turkey’s inflation problems. The sharpest increases in annual prices were in the transportation sector, at 107.6 percent, followed by food and non-alcoholic drinks prices at 91.6 percent, according to official data.
From Bloomberg: “With inflation at 58 percent and accelerating, Argentina’s $500 billion economy is an outlier even in a world where prices are taking off almost everywhere. It’s not just a pandemic-era problem: while the historical statistics are suspect, Argentina hasn’t had single-digit inflation in at least a decade.”
From the Associated Press: “Eurozone inflation hit a record 8.1 percent in May amid surging energy and food costs fueled in part by Russia’s war in Ukraine. Annual inflation in the 19 countries that use the euro currency soared past the previous record of 7.4 percent reached in March and April, according to the latest numbers published Tuesday by the European Union statistics agency, Eurostat. Soaring prices are weighing on household finances and making it more urgent for officials to act quickly to head off further increases in the cost of living. Energy prices jumped 39.2 percent, highlighting how the war and the accompanying global energy crunch are making life more expensive for the eurozone’s 343 million people.”
In the UK, an AP report said skyrocketing energy and food bills are pushing millions deeper into financial hardship. The cost of food and fuel in Britain has risen sharply, with inflation reaching 9 percent in April—the highest in 40 years. In the same month, millions of families saw their annual energy bills jump by 54 percent, amounting to an extra £700 ($863) a year on average for each household. A recent report from the International Monetary Fund said the UK is expected to be the slowest-growing economy out of the Group of Seven leading democracies in 2023 as the Ukraine war sets back the global economic recovery from the pandemic.
Annual inflation rate in the US hit 8.3 percent in April from a year ago, a rate that remains near its fastest pace in 40 years. Concerned most about skyrocketing gas prices and food costs, American workers complain that high inflation has wiped away some of their recent wage gains. Those at the low end of the income rung are once again struggling to make ends meet. Economists said the odds of the US going into a recession are rising.
In the Philippines, inflation rate in April surged to 4.9 percent from 4 percent in March. The bad news is that Saudi Arabia raised oil prices for July shipments to Asia. Bloomberg reported on Sunday that the world’s biggest oil exporter has raised prices for shipments sold under long-term contracts even after crude oil has already climbed more than 50 percent this year to almost $120 a barrel.
As the Philippines imports more than 90 percent of its fuel requirements, this means higher pump prices, which will push transport costs of goods. We hope that our economic managers will do the right things that can alleviate the pain of sky-high inflation. This early, however, we need to tighten our belts and eliminate unnecessary expenses.