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Investing 101Chapter 1 · Why invest at all
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Inflation: why cash loses value

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Explain inflation, see how much Jamaican prices have risen, and work out what money will buy in the future.

Bananas piled on a market stall with a handwritten price sign reading 45 a kilo
Photo: PAULIX04 / Wikimedia Commons, CC BY-SA 4.0. Cropped to remove shop signs
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1

Inflation means prices rise over time. When prices rise, the same money buys less.

2

The Statistical Institute of Jamaica (STATIN) tracks prices with the Consumer Price Index. It stood at 155.8 in September 2026, against 100 in 2019: shopping that cost J$1,000 then cost about J$1,558. In the year to August 2026, prices rose 7.9%.

3

The Bank of Jamaica (BOJ) aims to keep inflation at 4% to 6% a year. Even at 5% a year, prices double in about 14 years, so cash kept at home quietly loses value.

A single gold coin beside a grocery basket holding only a few items, with a red arrow rising behind it
Photo: My V.I.P. Academy

When prices rise, the same money fills a smaller basket.

Go deeper. To keep up, money has to grow at least as fast as prices. Savings interest that is lower than inflation still falls behind, even though the number in the account goes up. That is why money you will not need for many years is worth investing, carefully.

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For education only. Not financial, investment, tax or legal advice. Investing carries risk. Read more

Everything in this book is for education only. It explains how money and investing work in general. It is not financial, investment, tax or legal advice, and it does not recommend any particular investment, product or provider. Prices, rules and tax figures change: check them with the official source before you act. Before you make an investment decision, consider speaking to a licensed adviser where you live (in Jamaica, one licensed by the Financial Services Commission). Investing carries risk, including losing some or all of the money you put in.