Inflation is the sustained increase in the price level of goods and services that leads to a reduction in the purchasing power of money. It is measured monthly by Statistics Austria using a representative shopping cart. The calculated change in the Consumer Price Index (CPI) provides information about the purchasing power of the Austrians.
Especially at times of low interest rates investors are looking for new ways to counteract the inflationary loss of value. In this respect, certificates are an interesting investment alternative. An explanation of the inflation calculator and the included key figures can be found here.
Historical inflation rate
This calculator is based on the change in the Austrian Consumer Price Index (CPI). The filed historical inflation data go back to 1954 and make it possible to understand the price increases of the past. Please note that the historical inflation rate is no reliable indicator for the inflation rate of the future.
Inflation rate & purchasing power loss
The inflation rate represents the price increase of an average cart. Example: With an annual inflation rate of 1.5%, the price of the total cart rises from 1,000 EUR this year to 1,015 EUR in the following year.
On the other hand, the loss of the purchasing power describes the loss of the monetary value during this period and is not equal to the inflation rate. The proportion of the current 1,000 EUR to the 1,015 EUR next year is: 1000/1015 = 0.9852. Assuming an inflation rate of 1.5%, 1,000 EUR are only worth 985,22 EUR in the following year. This corresponds to a percentage purchasing power loss of 1.48%.
If you have any questions, please do not hesitate to contact your local bank adviser.