What is inflation and how are people affected?

Inflation means that when prices rise continuously, the money that comes with you becomes less valuable and is no longer enough to buy the same things as before.

This happens for several reasons:

• More money in the market: If the state prints more money, the value of old money becomes less, and prices are looking forward.

• High production costs: When gasoline, electricity or raw materials become more expensive, companies are forced to raise the prices of their products.

• Demand is higher than supply: if everyone buys the same item and enough, the price goes up.

But what is the impact of inflation on our daily lives?

Of course, the impact is direct and appears through 3 basic things:

• Your salary is not enough as before.

• Basic things like bread, gasoline, medicine, and electricity are becoming more expensive.

• People try to save or invest their money in a place that protects its value.

Real-life example from Lebanon

Before the crisis of late 2019, the price of a bundle of bread was 1500 lira, meaning one dollar, now it is 85 thousand lira, meaning less than one dollar. But the money that was enough to buy bread for the month is now only a small part of it, because the value of your income in dollars has decreased a lot because the Lebanese pound has lost 98% of its value.

In short, inflation is when Egyptians become less valuable and prices rise continuously, and this affects the purchasing power of each of us.