10 Times Inflation Destroyed Economies

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Cien Pesos

Photo by Alex E. Proimos

3. Argentina (1980s)

Argentina’s annual inflation rate hit 12,000% in 1989, and caused a near total collapse of the national economy.. The overall effect of hyperinflation was severe. One 1992 peso was equal to 100 billion pre-1983 pesos. The highest denomination bill at the time was the one million pesos note. The Peso was revalued three times, and wasn’t worth the paper it was printed on.

Argentina’s inflation stemmed from heavy external borrowing, and when that was cut off the government devalued the currency to increase its trade surplus.

Over the years the government tried economic reforms like The Primavera Plan with a reverse multiple exchange-rate system. Although this plan failed, later on the Argentinian government adopted another plan with new stabilization measures which managed to curb the runaway inflation.

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