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Inflation Calculator

See how much purchasing power your money loses to inflation: enter an amount, an average annual inflation rate and a term, and get the real value and the equivalent future cost.

Use an average annual rate. The ECB inflation target is around 2%; check your national statistics office's CPI for recent figures (INE in Portugal and Spain, ISTAT in Italy, INSEE in France).

Real value (purchasing power)
€820.35
Purchasing power lost
€179.65
Equivalent future cost€1,218.99
Cumulative inflation21.9%

Educational estimate, not financial advice. Future inflation is uncertain and may vary.

1

What inflation does to your money

Inflation does not reduce the figure in your account: it reduces what that figure buys. With average inflation of 2% a year, €1,000 kept still for ten years is still €1,000, but buys what costs about €820 today. The loss compounds like interest, only against you.

2

The two readings of the result

The calculator tells the same story two ways. The real value says what today's money will be worth in future purchasing power. The equivalent future cost says what something costing that amount today will cost in that many years. The first reading is for savings; the second for planning a purchase.

3

Which rate to enter

Use an annual average, not a single month's figure. The European Central Bank's inflation target is 2% over the medium term, and ISTAT publishes the NIC consumer price index every month. For a long term, try several scenarios rather than relying on one assumption.

4

Why it matters alongside returns

A 3% return with 2% inflation leaves roughly 1% of real return. A deposit account that looks safe can lose purchasing power if its net rate stays below inflation. It is the comparison that decides whether your savings really grow or only appear to.

Worked example

Example: €20,000 with average inflation of 2.5% a year over 15 years keeps a purchasing power of about €13,800 in today's money, a loss close to 31%. The other way round: something that costs €20,000 today will cost about €28,900 in fifteen years.

Frequently asked questions

What average inflation should I use?
For long-term projections many people use 2% a year, the European Central Bank's medium-term target. For the latest figure, look at ISTAT's NIC index. It is worth trying a higher scenario too: future inflation is uncertain.
Does inflation hit everyone the same way?
No. The price index is the average of a basket of goods and services, and your personal inflation depends on how you spend. Someone whose budget is dominated by housing and energy can experience inflation quite different from the published average.
What is "rivalutazione monetaria"?
It is the reverse operation: bringing a past amount to today's value with ISTAT's indices, for instance to update a rent or a debt. It needs the historical FOI index series; this calculator works with an average rate and does not replace ISTAT's official coefficients.
What is the real return?
The return net of inflation: roughly the interest rate minus inflation, exactly (1 + rate) ÷ (1 + inflation) − 1. It is the only figure that says whether your money buys more than before.

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Author: Thorben Rasmus Idel · Reviewed by: Nahar Geva · Last reviewed: