How inflation affects the economy?

Inflation is an increase in the general price level of goods and services in an economy over a period of time. When the general price level rises, each unit of currency buys fewer goods and services; consequently, inflation reflects a reduction in the purchasing power of money. Inflation can have a negative impact on the economy as it can make it more expensive for consumers to purchase goods and services, and it can also make it more difficult for businesses to plan for the future. Additionally, high inflation can lead to higher interest rates, which can slow economic growth.

The effects of inflation are often not directly felt but are played out over a long time, especially long-term investments are vulnerable to inflation.


At Horizon65, we created a mobile app that enabled you to check the effect of inflation on your savings.

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