The decline in purchasing power from inflation

If a house cost R5000 in 1913 in South Africa, it would cost over R1.4 million in today’s money. Accumulated inflation has meant that the local purchasing power of one rand in 1913 has fallen to less than a fifth of one cent in South Africa today. In the US, where inflation has been lower over the last several decades, the value of a dollar has declined to about 2.5 cents over the same period. Of course, faster inflation has also meant that the value of the rand has weakened relative to the dollar, so that there has been a meaningful decline in South African purchasing power in common currency terms.

Codera Blog Newsletter

Sign up to receive a weekly summary of our blog posts