Why does inflation occur?

Inflation occurs when the general level of prices for goods and services in an economy increases over time, resulting in a decrease in the purchasing power of money. This can happen due to a variety of factors, such as an increase in the supply of money or a decrease in the supply of goods and services. Other causes of inflation include rising production costs, increased demand for goods and services, and changes in exchange rates. Inflation can have a significant impact on an economy, affecting the cost of living, interest rates, and overall economic growth.

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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