Highest Inflation by Country (and How You can Protect your Wealth Against it)

Highest inflation by country: let's discover the countries with the highest inflation rates in history, and what you can do to protect your assets from inflation

In this post we will analyze some of the highest inflation rates by country in history, and the reasons behind it. Hyperinflation is often the result of government inefficiency when determining its monetary policies. It is not that uncommon, and has happened multiple times during the past one hundred years.

00:37 What is inflation?

Before we list the countries with the highest inflation in history, let's understand what is inflation, and what causes it. In economics, inflation is when prices rise and the value of currency decreases over a period of time. 

Usually, inflation is neither high nor harmful. In fact, a small, controlled inflation might even be good for the overall economy. However, a number of reasons can push a stable economy into a two digit yearly inflation, and in some extreme cases, into hyperinflation territory.

The main reasons forcing a country into hyperinflation are: wars, government instability and poor monetary policies, often expressed through excessive money printing.

01:15 Germany

Who would have thought that Germany, a stable and wealth country nowadays, was once the setting for an inflation crisis. It happened in the 1920's, in the aftermath of the First World War, which Germany lost to the allies.

The inflation in the Weimar Republic, which then became a hyperinflation were a result from Germany suspending the gold standard during the war, and mass printing money after the war to pay for reparations.

A loaf of bread in Berlin that cost around 160 Marks at the end of 1922 cost 200,000,000,000 (billion) Marks by late 1923.

01:42 Hungary

The end of the First World War also cause another inflation, this time in Hungary. The cause for this inflation was mostly the political instability in the country, coupled with the government mismanagement in their monetary policy. 

One quintillion Hungarian pengő.

One of the critical events that pushed the country into hyperinflation was the so called Hegedüs reform. Among other things, the reform imposed a 20% levy on bank deposits, making people less likely to save. On top of that, the government was printing money like crazy, forcing the country into hyperinflation.

The hyperinflation that struck Hungary from 1945 to mid 1946 was the highest recorded in history. 

02:21 Zimbabwe

Zimbabwe is another country notable for its staggering inflation rates. The history of Zimbabwe's hyperinflation started in the 80's. Zimbabwe's government poor decisions, an inefficient land reform and rampant corruption had a key role in the country's inflation and economic failure.

In 2004, Zimbabwe's inflation was already at 624%. But it was during 2008 and 2009 that things spiraled out of control in Zimbabwe. In November 2008, the inflation peaked at 89.7 sextillion percent (89,700,000,000,000,000,000,000%). Zimbabwe issued a 100 trillion Zimbabwean dollar banknote in 2009.

03:05 Venezuela

Venezuela is a good example of absolute government economic mismanagement. Apart from failing in virtually all of its public policies, Venezuela managed to have some of the highest hyperinflation ever recorded in the last decade.

The cumulative inflation from 2016 to April 2019 was estimated at 53,798,500% in Venezuela. With its monetary policy completely in shambles, Venezuela is shifting towards the dollarization of the economy.
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