Lebanon food price surges as country hits hyperinflation. Steve H. Hanke, professor of applied economics at Johns Hopkins University, and an authority on hyperinflation explains that Lebanon is the first nation in history to experience hyperinflation in the Middle East and North Africa region (MENA).
Hanke and his colleague Nicholas Krus traced 61 other instances of hyperinflation in world history, including Hungary in 1945 and Yugoslavia between 1992 and 1994 when hyperinflation peaked at 313 million percent per month.
Hyperinflation occurs when the inflation rate of a country surpasses 50% per month for 30 consecutive days. Lebanon entered the record books with the world’s 62nd episode of hyperinflation on July 22nd, Hanke detailed.
According to Hanke “The underlying causes of inflation are always the same.” Governments start running larger and larger fiscal deficits and call on the central bank to fund those deficits because tax and bond financing avenues are inadequate. In hyperinflations, central banks are required to virtually fund the governments entire fiscal operations.”
Hanke pointed out that this is Lebanon’s worst crisis since the 1975-90 civil war. The situation worsen when the country defaulted on its debt in March.
[image: Maxime Guy]