Inflation is a process of sustained increases in the general price level over a period of time, typically 12 months.
Inflation can be calculated for a country, for specific regions in a country and for different income and demographic groups, for instance, pensioners.
These different calculations are important because the spending patterns of regions and groups differ. That means that their rates of inflation also differ. It is therefore important for each household to have a clear understanding of its own inflation rate.
A number of countries allow for the development of this improved understanding. For example, South African households can use an Internet tool such as the personal inflation calculator of Statistics SA. A personal inflation calculator, based on the spending patterns of households, is also available for the Euro
The phrase describing inflation as ‘enemy number one’ is borrowed from the research done by South African businessman Dr Anton Rupert on the worldwide inflation problem suffered in the 1970s.
He described inflation this way due to its distortive impact on the economies of countries and the wealth and financial well-being of households.
