What is a good inflation rate?

A good inflation rate is generally considered to be around 2% per year. This level of inflation is seen as low enough to avoid causing significant economic disruption, but high enough to promote economic growth and prevent deflation. Central banks in many countries aim for this level of inflation when setting monetary policy, although there can be some variation depending on the specific economic conditions of each country. High inflation rates can lead to rising prices, reduced purchasing power, and decreased consumer confidence, while low inflation rates can signal economic stagnation and potentially lead to deflation.

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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