Investors are looking for suitable investment products to counteract the loss of value in the event of inflation. Certificates are an interesting option for this. But what and how high is the loss of purchasing power of your money?
Inflation refers to the sustained increase in the prices of services and goods. As a result: money loses value, as you get less for the same amount. Inflation is determined monthly by Statistics Austria using a representative basket of goods. The calculated change in the consumer price index (CPI) provides information about the change in the purchasing power of Austrians.
- Inflation rate in practice: With an annual inflation rate of 3 %, the price of the entire basket of goods increases, for example, from 1,000 euros this year to 1,030 euros the following year.
- Purchasing power: The loss in value of money during this period is referred to as the loss of purchasing power. This is not the same as the inflation rate. Assuming an inflation rate of 3%, 1,000 euros will only be worth 971 euros the following year. This corresponds to a loss in purchasing power of 2.9%. Calculated as follows:
- 1.0/1.03 = 0.9709
- (971/1,000)-1 = -0.029 * 100 = -2.9%
- Historical inflation: The inflation calculator is based on the change in the Austrian consumer price index (CPI/HICP). The historical inflation data are stored up to the year 2000. Please note that historical inflation does not allow any reliable conclusions to be drawn about future inflation. For the current year, the average of the monthly data published to date is used.
Source: Oesterreichische Nationalbank, ONB
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