How does inflation affect our economic growth?

However, the impact of inflation on economic recovery cannot be assessed with complete accuracy. Some background details will explain why the economic results of inflation will differ as the inflation rate varies. read more

Inflation at a decent pace helps in the growth of the economy. The growth of a economy and inflation are directly proportional. Therefore, countries always try to maintain a level of inflation in order to achieve economic growth. Although, high inflation is harmful for the economy. In order to grow the economy there has to be a decent inflation. read more

Inflation affects the economy in different ways in different scenarios: Healthy levels of inflation can support economic growth. Lower interest rate with inflation, increases expenditure and boosts economic growth. read more

In a healthy economy, sometimes market forces will require that companies reduce real wages, or wages after inflation. In a theoretical world, a 2% wage increase during a year with 4% inflation has the same net effect to the worker as a 2% wage reduction in periods of zero inflation. read more