Inflation

Economics

The rate at which the general level of prices for goods and services rises, eroding purchasing power.

Sources

1. IMF Finance & Development, Back to Basics — Inflation imf.org accessed 23 September 2026

The IMF’s plain-language definition: inflation “measures how much more expensive a set of goods and services has become over a certain period, usually a year”. Two things sit inside that sentence and are easy to miss — it is a measure of a set of goods, so it describes an average basket and not any one household’s costs; and it is a rate over a period, so falling inflation still means prices rising, just more slowly.

The IMF’s own explainer. Index construction, weighting and the difference between headline and core measures are set by each national statistical agency and are not covered here.

Related terms

• Balance of Payments
• Credit Rating
• Current Account Deficit
• EURIBOR
• Exchange Rate
• Foreign Direct Investment

From the AJG lexicon archive (July 2026).