How does hyperinflation affect prices?

The next worst, known as galloping inflation, sends prices up 10% or more per year. Hyperinflation has two main causes: an increase in the money supply and demand-pull inflation. The former happens when a country's government begins printing money to pay for its spending. As it increases the money supply, prices rise as in regular inflation.

What is hyperinflation in economics?

In economics, hyperinflation is a very high and typically accelerating inflation. It quickly erodes the real value of the local currency, as the prices of all goods increase. This causes people to minimize their holdings in that currency as they usually switch to more stable foreign currencies.

Is hyperinflation a high case of inflation?

Hyperinflation is an extreme case of inflation, not just a high case. Inflation higher than 5% is considered high inflation. Inflation of 50% or more per month is considered hyperinflation. For comparative purposes, the U.S. inflation rate measured by the CPI averaged about 2.5% per year from 2013 through 2022.