Calculate how inflation and the cost of living erode your purchasing power. Uses official Stats SA CPI data and SARB's 3-6% inflation target band.
Calculate the effects of inflation on your money
The SA Reserve Bank targets inflation between 3-6%. When inflation exceeds this, they typically raise interest rates to cool the economy.
To maintain purchasing power, your savings must grow faster than inflation. Consider equity investments, property, or inflation-linked bonds.
If your salary doesn't increase by at least the inflation rate, you're effectively earning less each year in real terms.
Over the past 10 years (2014-2024), SA inflation averaged about 5.1% per year. This means prices roughly doubled over this period, and R1,000 in 2014 has the same buying power as about R1,650 today.
Stats SA measures the Consumer Price Index (CPI) monthly. The SARB targets 3-6% inflation. If your salary increase is below CPI, you are effectively earning less each year.
Stats SA measures Consumer Price Index monthly
SARB aims to keep inflation within this band
Your money buys less each year
Must beat inflation to grow real wealth
| Year | Rate | Year | Rate |
|---|---|---|---|
| 2024 | 4.4% | 2019 | 4.1% |
| 2023 | 5.9% | 2018 | 4.7% |
| 2022 | 6.9% | 2017 | 5.3% |
| 2021 | 4.5% | 2016 | 6.3% |
| 2020 | 3.3% | 2015 | 4.6% |
If your investment returns 8% but inflation is 5%, your real return is only 3%. To grow wealth, you need returns that beat inflation after tax.
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