Free purchasing-power calculator
Inflation calculator
See how a steady annual inflation rate can raise future prices and reduce what the same nominal amount can buy.
Inflation assumptions
Enter an amount and period
The estimate assumes the same inflation rate compounds once per year throughout the period.
Year-by-year inflation impact
Compare the rising future cost with the declining purchasing power of the same nominal amount.
| Year | Future cost | Purchasing power | Cumulative inflation |
|---|---|---|---|
| Year 1 | GEL 10,500.00 | GEL 9,523.81 | 5.00% |
| Year 2 | GEL 11,025.00 | GEL 9,070.29 | 10.25% |
| Year 3 | GEL 11,576.25 | GEL 8,638.38 | 15.76% |
| Year 4 | GEL 12,155.06 | GEL 8,227.02 | 21.55% |
| Year 5 | GEL 12,762.82 | GEL 7,835.26 | 27.63% |
| Year 6 | GEL 13,400.96 | GEL 7,462.15 | 34.01% |
| Year 7 | GEL 14,071.00 | GEL 7,106.81 | 40.71% |
| Year 8 | GEL 14,774.55 | GEL 6,768.39 | 47.75% |
| Year 9 | GEL 15,513.28 | GEL 6,446.09 | 55.13% |
| Year 10 | GEL 16,288.95 | GEL 6,139.13 | 62.89% |
How the inflation calculation works
Inflation is the general rise in prices over time. When prices go up, the same amount of lari buys less than it did before. The calculator turns an annual inflation rate into two practical answers: how much money you will need in the future to buy what an amount buys today, and how much today's amount will be worth in today's terms after the same period.
Enter an amount, an expected average annual inflation rate and a number of years. The rate is compounded: each year's price increase is applied on top of the previous year's prices, the same way interest compounds on savings. The yearly table shows the cumulative inflation, the future cost and the remaining purchasing power at the end of each year.
You choose the inflation rate, so the result is a scenario, not a forecast. For official figures on how prices have actually changed in Georgia, see the consumer price index published by Geostat, the National Statistics Office of Georgia (geostat.ge). The National Bank of Georgia (nbg.gov.ge) publishes its inflation outlook and monetary policy decisions.
Future cost = Amount × (1 + π)^t Purchasing power = Amount ÷ (1 + π)^t
π is the annual inflation rate as a decimal (5% = 0.05) and t the number of years. Cumulative inflation = (1 + π)^t − 1.
Example: 10,000 GEL over 10 years at 5% a year
The 5% rate below is an assumption chosen to illustrate the calculation, not a forecast. Suppose prices rise by 5% a year for 10 years.
- Price factor: 1.05^10 ≈ 1.6289, so prices rise by about 62.89% in total.
- Future cost: what costs 10,000 GEL today would cost about 16,288.95 GEL in 10 years.
- Purchasing power: 10,000 GEL kept in cash would buy only what about 6,139.13 GEL buys today.
- Value lost: 10,000 − 6,139.13 ≈ 3,860.87 GEL of purchasing power.
At a lower 3% rate, the same 10,000 GEL would still keep about 7,441 GEL of today's purchasing power. Even moderate inflation adds up over a decade, which is why money set aside for the long term should earn a return.
How to read the result
- Compare your return with inflation. If a deposit pays 8% while prices rise 5%, your real gain is only about 3% a year. Use the compound interest calculator to see the nominal growth, then this one to see what it is worth.
- Plan big goals in future prices. If a goal is several years away, increase its cost by expected inflation before you work out how much to save.
- Try more than one rate. Running a low, a middle and a high scenario shows how sensitive your plan is to rising prices.
- Keep only short-term money idle. Cash in a current account loses purchasing power every year; keep there what you need soon and put the rest where it can earn.
- Mind currency effects. Prices of imported goods in Georgia also react to the lari's exchange rate, so inflation in lari and changes in the dollar rate are often connected.
Frequently asked questions about inflation
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