10 Times Inflation Destroyed Economies
8. Nicaragua (late 1980s)
A popular joke among the Nicaraguans in the 1980s was that everybody was a millionaire in the country. The government had taken to printing currency denominations of 100 million new cordobas. As a result, the country saw its annual inflation rate rise to over 30,000% in 1987.
Multiple reasons contributed to the collapse of the economy, including a rebel war, a drop in agricultural exports, the mismanagements of the leftist government, and US sanctions on the country. This made the national currency devalued against the dollar. The government took to rubber-stamping the currency to higher denominations.
The inflation subsided at the end of armed conflict. The economic reforms were instituted by former President Violeta Chamorro after the 1990 elections saw inflation levels ease. Chamorro was able to increase foreign investment and draw on U.S. support.
