In addition, stagnant worker wages and a hesitation from banks to easily distribute loans to ordinary citizens have also caused the inflation rate in the euro zone to be relatively low. Meanwhile, the inflation rate in the Middle East and North Africa amounted to more than 6.2 percent.ĭue to economical progress following the global financial crisis, developed countries in the European Union and the euro area set forth economic strategies to strengthen their economy and maintain a stable economy. The inflation rate in industrialized countries in 2015 was just about 0.35 percent. Interestingly, in 2015, the inflation rate in Venezuela was approximately three times as high as the inflation rate in Ukraine.Īs a result of a global economic downturn, the lack of a sufficient central bank, and the rise in interest rates, the cost of living in the Middle East has also become much higher than in industrialized countries. The nations in the world with the highest inflation rates in 2015 were Venezuela and Ukraine. The global regions with the highest year-on-year inflation rate in 2014 are the Middle East and North Africa, as well as Africa Sub-Sahara. The highest recorded global inflation of the past decade in comparison with the previous year took place in 2008, when it increased by more than 6.4 percent in comparison to the global inflation rate in 2007. Global economy has suffered immensely since the global financial crisis in 2008 and that has caused global inflation to increase. Inflation is often defined as the continued increase in the general level of prices of goods and services. In 2020, the inflation rate worldwide amounted to approximately 3.23 percent compared to the previous year. All rights reserved.This statistic shows the global inflation rate compared to previous year from 2017 to 2027*. Required amount = amount * (1 + inflation rate)^number years Related Calculators and Chart MakerĬopyright © Richard A. The required amount is computed using the standard future value formula: Reduced amount = amount/(1 + inflation rate)^number years The reduced amount is computed using the standard present value formula: Therefore, you need to factor it into your nest egg planning and implementation. You can see how inflation reduces the value of your money in the future. The second result (Required Amount) is $108,366.67, which is amount of money that you need in 20 years to match the purchasing power of $60,000. The first result (Reduced Amount) is $33,220.55, which represents the value of $60,000 in 20 years. How much money would you need in 20 years to maintain the same purchasing power as today? Assume the annual inflation rate averages 3%. Suppose that you needed $60,000 for your first year of retirement. Use the Inflation Calculator to help you study the impact inflation is likely to have on your finances. Inflation over time does erode the value of money. For instance, $100 that you have today, in 15 years given a three percent inflation rate, would be worth only $64.19. In 15 years, the same item would cost $155.80, or over 50 percent more than today.Īnother way to understand the impact of inflation is to determine the value of today's dollar in the future. For example, an item that costs $100 today would cost $134.39 in ten years given a three percent inflation rate. Just about everything that we buy goes up in price with time. Even the most financially-wise people wince at the thought of inflation eating away at the purchasing power of their savings and investments. But one factor that no one can control is the constant increase in the price of goods and services caused by inflation. Hopefully, savvy investing along with prudent spending and budgeting will prevent you from draining down your retirement money too quickly. Nurturing your financial nest egg is an important goal for all investors, particularly if you are near retirement or already retired. Inflation Calculator - Save Enough to Account for Inflation
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