Portal:Business and economics/Selected economy/November 2007
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![Victoria Falls or Mosi-oa-Tunya (the Smoke that Thunders), is situated on the norther border of Zimbabwe with Zambia.](../../../../images/shared/thumb/e/ee/Victoria5.jpg/200px-Victoria5.jpg)
The Economy of Zimbabwe faces a variety of economic problems after having abandoned earlier efforts to develop a market-oriented economy. Problems include a shortage of foreign exchange, soaring inflation, and supply shortages. Zimbabwe's involvement from 1998 to 2002 in the war in the Democratic Republic of the Congo drained hundreds of millions of dollars from the economy.
Mineral exports, agriculture, and tourism are the main foreign currency earners of Zimbabwe. Zimbabwe is the biggest trading partner of South Africa south of the equator. Since land redistribution began, agricultural exports, especially tobacco, have declined sharply. The Zimbabwe Conservation Task Force released a report in June 2007, estimating 60% of Zimbabwe's wildlife has died since 2000. The report warns that the loss of life combined with widespread deforestation may negatively impact the tourist industry. The downward spiral of the economy has been attributed mainly to mismanagement and corruption of the Mugabe regime and the eviction of more than 4,000 white farmers in the controversial land redistribution of 2000.
Inflation rose from an annual rate of 32% in 1998 to an official estimated high of 7,634.8% in August 2007. The IMF predicted inflation will reach 6,430% by the end of 2008. Estimates from private sector economists estimate inflation at about four times the official figures. On June 21, 2007 the U.S. ambassador to Zimbabwe, Christopher Dell, told The Guardian newspaper that inflation could reach 1.5 million per cent (1,500,000%) by the end of the year. The current unofficial inflation rate is above 11,000% and the black-market exchange rate is Z$400,000 to the pound.On July 13, 2007 the Zimbabwe government said it had temporarily stopped publishing (official) inflation figures, a move that observers said was meant to draw attention away from runaway inflation which has come to symbolize the country's unprecedented economic meltdown.
In August 2006 a new revalued Zimbabwean dollar was introduced, equal to 1000 old Zimbabwean dollars. The exchange rate fell from 24 old Zimbabwean dollars per U.S. dollar (USD) in 1998 to 250,000 old or 250 new Zimbabwean dollars per USD at the official rate.