A bogeyman called inflation
It is not surprising that product prices in the market economy can change any time upwards or downwards. We talk about inflation if the prices of products and services increase. The reason is usually due to an increase in the amount of funds in circulation, which leads to a gradual loss of their value.
What can the consumer expect in the coming period? In terms of the economy, the year 2019 has been a year of negative news, uncertainty, and negativity. Based on recent data from the Czech National Bank, the prospects for the improvement of the situation are not foreseen. We will experience the most significant price increases in the last 10 years. The inflation level is 2.7%. Consumers will face these price increases in all aspects of = ordinary life. We will need to dig deeper into our pockets when purchasing items for common daily consumption and significant price increases will also be seen when purchasing alcoholic and tobacco products. Moreover, price increases will be reflected in housing and energy costs. It is necessary to put aside approximately 2.8% more for holidays on average compared to the past. The price increases are visible in the sector of catering and accommodation services, culture and education.
What is the best recommendation to get ready for the arrival of a possible crisis? Try to protect your finances against the market’s negative features or to make more profit. Investing in consumer products in this period is meaningless since they have no value. If we assume the economy’s deceleration and a weakening currency, investing funds in bonds seems to be the correct choice.
Regular yields will provide you with coverage for the increased costs caused by inflation.