Why do we need inflation?

Inflation is necessary to promote economic growth and stability. A controlled level of inflation can stimulate spending and investment, which in turn can boost economic activity and create jobs. Additionally, moderate inflation can help prevent deflation, which can lead to decreased consumer spending, reduced investment, and economic recession. Inflation also allows for adjustment of wages and prices, which can help maintain economic competitiveness and encourage innovation. However, high inflation rates can lead to negative effects such as reduced purchasing power and increased uncertainty, making it important to keep inflation at a moderate and stable level.

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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