Inflation and purchasing-power calculator
Explore what a constant annual price-change assumption does to a rand amount. The tool shows both a future price for today’s basket and today’s equivalent purchasing power of unchanged money. Your input is a scenario, not a forecast.
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Keep the two questions separate
Future cost asks how much a basket priced today might cost under the entered assumption. Purchasing power asks what an unchanged future sum is worth in today’s price units. SARB explains inflation, disinflation and deflation in its published note [1]. A national index does not identify the future price of your particular grocery basket or rent.
Use the visible formulas
With amount P, annual change r as a decimal and years n, future basket cost = P × (1 + r)^n. Unchanged money’s purchasing power = P ÷ (1 + r)^n. Positive inflation raises the modelled basket cost; a negative input models falling prices. Zero change leaves both amounts unchanged. The tool uses annual compounding with one constant rate.
Compare scenarios without inventing certainty
Run a lower and higher assumption and keep each labelled. If a savings product is being considered, its nominal return, fees and tax require a separate calculation. This tool does not recommend an investment, fetch a current CPI figure or establish an inflation target. Use official statistics for a historical reference and actual prices for a household budget.
Compare price change without treating it as income growth
A price-change scenario says nothing about whether your income will increase by the same amount. Keep the household income assumption separate when updating a budget. If you use different assumptions for food, transport and rent, calculate those categories separately instead of applying one number to the whole basket without explanation. For the same starting amount and years, save the low and high scenario results with their input rates. The difference describes sensitivity to your assumptions; it is not a probability range or a central-bank forecast. This tool leaves money unchanged and therefore does not measure an investment’s after-fee real return.
A calculation you can check
Fictional 5% scenario for R1,000 over two years: 1.05² = 1.1025. Future basket cost is R1,102.50; unchanged R1,000 has R907.03 purchasing power in today’s units. This 5% input is not current CPI or a prediction.
Questions about this decision
Does the entered rate predict inflation?
No. It is a constant scenario chosen by you, with no probability attached.
Why do the two results differ?
One multiplies a present basket price; the other discounts unchanged money into present price units.
Can I use historical inflation?
Yes, as a labelled assumption. One historical figure is not evidence that the same rate will continue.
Does lower inflation mean falling prices?
SARB’s note distinguishes slower price growth from deflation [1]. Keep the sign of your entered rate clear.
Can I enter a negative rate?
The tool accepts an annual scenario from −10% to 100%. A negative value models falling general prices within that mathematical scenario.
Does this include interest earned?
No. The money is unchanged. Model savings growth separately before comparing a real return.
Are taxes included?
No. No investment return, fee or tax is modelled in this purchasing-power calculation.
Does the result apply to every item?
It applies to the hypothetical basket under one entered rate, not a guaranteed price for an individual product.