Inflation. Devaluation. Are both of them the same? Yes. And no. They ARE the same, BUT ONLY in some context.
So what’s the DIFFERENCE between “Inflation” and “Devaluation”?
Inflation and devaluation are both big words. Words used daily in most business and sectors. So are you sure you are using the right words?
The purpose I’m sharing this is, I come across people time to time who mix up both of the words mentioned. No, I am not a professional in business or economics, but some reading here and there made me realize that those two words aren’t really the same, although they might be intertwined. Plus most of the time when I see people complaining about the economics or their daily consumerism, it is always “inflation, inflation, inflation”
So before going on, I suggest you guys take a peek at this site which breaks down the words into simple explanation.
Inflation happens when a price is higher than most prices. A very good example would be living in a city will be much costlier than the country side as prices of groceries, services and etc. are generally pricier. If you compare the price of an apple (or whatever commodity that pleases you! :D) bought in a city for 2 dollars (for example) and an apple bought in a village for 1 dollar, it is safe to say that the price of a city-bought apple is inflated compared to the village-bought apple.
Devaluation on the other hand, is much more about the worth and value of a currency. Devaluation means losing value. An apple from our grandparents or ancestors day could well be worth around 50 cents (example again!). Compare with an apple today which cost 2 dollars, it is fair to say prices way back then was cheap, only because back then, money has SO MUCH VALUE that you just need 50 cents for an apple! Now with money losing it’s value, you’ll end up paying more for an apple! And it’s not because your fruit seller is ripping you off to be a millionaire!
So I hope with my layman explanations and the site linked above would give you guys a little insight of what inflation and devaluation is. It isn’t the same.