Inflation

Inflation is not an abstract concept. It is the feeling that the supermarket has become more expensive, even buying the same things. It is the rent that goes up on the contract anniversary. It is the salary that no longer stretches as it used to.

How it is measured

The Consumer Price Index (CPI) is calculated by government agencies based on a basket of products and services that reflects the consumption of the average citizen (food, transportation, housing, health, clothing, communication, etc.). It is the official metric used by the Central Bank as an inflation target.

Effect on your life

• Salary without adjustment loses purchasing power every year.
• Investment with a return below inflation impoverishes you (negative real return).
• Rent is adjusted annually by indices linked to inflation (CPI).
• Debt with fixed interest becomes "cheaper" if inflation accelerates (you pay in weaker currency).