Saving and investing basicsStep 1 of 6
How inflation eats your money
Inflation through a bazaar shopping basket: why cash under the mattress loses value and how to work out real return.
Same basket, different price
Imagine you buy the same basket at the bazaar every week — bread, potatoes, tomatoes, oil, a little meat. Last year it cost you 40 AZN; this year the very same basket costs 42 AZN. The basket hasn't changed, but it takes more money.
What is inflation?
Inflation is the rise in the general level of prices of goods and services over time. As prices rise, the same money buys less — its purchasing power falls.
Question
The basket went up from 40 to 42 AZN. By what percentage did the price rise?
The numbers in this lesson are examples to show the calculation. You can follow the country's actual inflation in official statistics and in Central Bank reports (cbar.az).