A lower inflation number can sound like relief while the supermarket receipt says otherwise. Both can be true.
Inflation measures the speed of change, not the height already reached. When that speed falls from 10% to 2%, prices are generally still rising—just more slowly. To show the difference, DataVault compounded annual consumer-price inflation across 42 successfully collected World Bank country series.
Prices have a memory
Belgian inflation was 2.5% in the latest collected 2025 observation. Yet compounding the annual rates from 2021 through 2025 produces a 23.5% increase. That is the gap between a policy success—slower inflation—and a household reality—a permanently higher starting point.
Costa Rica makes the logic even clearer. Its latest rate was slightly negative, at -0.1%, but the five-year path was still about 10.2% higher. One year of stable prices does not erase the climb.
The same headline hides radically different journeys
Among countries with a full 2021–25 series in our collected set, Malaysia rose about 12.1%, Indonesia 14.3%, Kuwait 17.4%, Senegal 21.4%, Belgium 23.5%, Ghana 179.7%, Suriname 366.7% and Türkiye 577.9%.
These are national aggregates, not a cost-of-living league table. Consumption baskets, subsidies, exchange rates and measurement differ. The useful insight is within each country’s path: a latest annual rate should be read beside the accumulated level it follows.
National prices are only the first join
The burden depends on who buys what. Lower-income households devote more of their budget to essentials such as energy and food; renters and owners face different pressures; wage growth, household size and geography change exposure. That is why an analyst needs population, labour, housing and energy data beside inflation.
A recent Joint Research Centre analysis of a Middle East energy shock reached a similar distributional point: lower-income households can be hit hardest. The economic question is therefore not simply “what is inflation?” but “whose essential basket rose, where, and did income keep pace?”