Who loses from inflation?

Inflation is an increase in the overall price level of goods and services in an economy. It can have a number of negative effects, which can be felt by different groups of people in different ways. Some of the groups that may lose from inflation include:

  • Savers: People who have saved money in cash or fixed-income investments such as bonds may see their purchasing power decline as prices rise.
  • Retirees and fixed-income earners: People who are living on a fixed income, such as retirees, may find it difficult to afford necessities as prices rise.
  • People on fixed wages: People with fixed wages may find it difficult to afford the increasing prices of goods and services.
  • Businesses: Companies that produce goods and services may find it difficult to pass on higher costs to consumers, which can lead to lower profits.
  • Countries with weak currencies: Inflation can be particularly harmful to countries with weak currencies, as it can make their exports more expensive and less competitive in the global market.

It’s important to note that not all groups lose from inflation, some groups such as debtors and government may benefit from inflation. However, overall, inflation can have negative effects on the economy and the well-being of many people, especially those who don’t hold real assets.

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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