Is inflation good for the economy?

The effects of inflation on the economy can be both positive and negative, and it largely depends on the level of inflation. Low inflation can be beneficial for the economy as it promotes price stability and encourages consumer spending. On the other hand, high inflation can be harmful as it reduces the purchasing power of consumers and can lead to economic instability. In extreme cases, hyperinflation can cause economic collapse. Therefore, while some level of inflation is necessary for a healthy economy, excessive inflation can be damaging.

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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