<p><strong>Inflation</strong> is the rate at which the general level of prices for goods and services rises over time, leading to a decrease in the purchasing power of currency.</p>
<p>Inflation matters because it erodes the value of money and affects consumer spending, savings, and investment decisions. For instance, if inflation is 5% annually, a product that costs $100 today will cost $105 next year. Central banks aim to maintain a low, stable inflation rate, typically around 2%, to ensure economic stability.</p>