Is there any point to budgeting in a hyper-inflationary environment?

Question

An example is of Zimbabwe where real inflation is around 6000%. In normal/stable environments budgets are drafted for the coming financial year (i.e. 12 months). However, in Zimbabwe no one call accurately forecast things like inflation, the exchange rate or interest rates meaning that trying to predict revenue, sales etc can be difficult; so in such an environment how can businesses address the issue, how do they budget if its at all possible or necessary?

An example is of Zimbabwe where real inflation is around 6000%. In normal/stable environments budgets are drafted for the coming financial year (i.e. 12 months). However, in Zimbabwe no one can accurately forecast things like inflation, the exchange rate or interest rates meaning that trying to predict revenue, sales etc can be difficult. Furthermore, if the industry is regulated they are expected to use official inflation, exchange rate and interest rate figures to calculate product costs; so in such an environment how can businesses address the issue, how do they budget if its at all possible or necessary?

Answer 1

Price all transactions in US Dollars.

Answer 2

Yes - usually something else takes the place of paper money as the active currency - say cartons of cigarettes - or bullion - or tined food.

Basically in hyperinflation the day to day economy is replaced by bartering.