The Cost of Waiting
See exactly how inflation destroys your purchasing power year over year.
Quick Presets
Purchasing Power Left
If Invested (15% return)
Purchasing Power Over Time
Inflation & Purchasing Power — Common Questions
If Pakistan's inflation rate is 12% per year, Rs. 1,000,000 today will have the purchasing power of approximately Rs. 893,000 in one year and Rs. 322,000 in 10 years — in today's prices. Your money must grow faster than the inflation rate just to maintain its value. Money kept in a low-interest account loses real value every year.
Nominal return is the raw percentage gain on your investment. Real return adjusts for inflation: Real Return ≈ Nominal Return − Inflation Rate. If your savings account pays 10% interest but inflation is 12%, your real return is approximately −2% — you are losing purchasing power despite earning nominal interest.
Pakistan's CPI inflation has averaged approximately 8-12% over the past decade, with peaks above 20% during 2022-2024. For long-term financial planning, using 10-12% as a baseline assumption is reasonable. Check the State Bank of Pakistan's website for the current official CPI figure.
To beat inflation you need investments with real returns above the inflation rate. Historically, KSE-100 equities have provided the strongest inflation-beating returns in Pakistan, averaging 20-25% nominal in PKR over long periods. Real estate, gold, and USD savings also serve as inflation hedges. Keeping money in PKR savings accounts often fails to beat inflation.