Who benefits from inflation and who gets hurt by inflation?

Inflation can have both winners and losers. Those who benefit from inflation are borrowers, particularly those with fixed-rate loans. This is because the real value of their debt decreases over time as inflation rises, making it easier to pay off. Investors in assets that appreciate in value during inflation, such as real estate or stocks, may also benefit.

On the other hand, those who are hurt by inflation are savers and individuals on fixed incomes, such as retirees, because their purchasing power decreases as the value of their savings is eroded by inflation. Additionally, those who depend on wages that do not keep pace with inflation may also be negatively affected, as their real wages decrease. Finally, lenders who have extended fixed-rate loans may lose out as the real value of their debt decreases.

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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