In June 2008 the consumer price index in Zimbabwe was 8 million percent higher than it was a year before. A $12 lunch in local currency cost 1.1 trillion Zimbabwe dollars. What caused Zimbabwe to suffer from this crippling hyperinflation?
The simple answer is that the political and economic system began to self destruct. Zimbabwe has been ruled since 1980 by the dictator Robert Mugabe, whose policies to intervene militarily in African conflicts and expropriate white owned farms had the cumulative effect of crippling the economy. As the economy deteriorated, tax revenues declined, as well as export revenues necessary to purchase imported fuel. To pay soldiers to help keep him in power, to bribe his supporters, and to keep the government functioning, Mugabe and his central bank simply resorted to printing new banknotes. The result was hyperinflation and further deterioration of the economy as the financial system collapsed.