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Economics vocabulary · Central Banks and Interest Rates

Inflation target

Meaning in economics, with examples

nounCommon term

In economics, inflation target means: The rate of inflation that a central bank officially aims to achieve over the medium term, such as 2% a year.

In Turkish: enflasyon hedefi

How it is used

Many central banks in advanced economies aim for about 2%. Inflation can be above, below or back at target; banks hit, miss or overshoot their targets. The policy framework built around such a target is called inflation targeting.

Example sentences

  1. Inflation has been above the central bank's 2% inflation target for three years.

  2. The bank expects inflation to return to its target by the end of next year.

Common collocations

  • meet the inflation target
  • miss the target
  • above target
  • inflation targeting
  • medium-term target
  • inflationA general and continuing rise in the prices of goods and services in an economy, which means each unit of money buys less over time.
  • central bankThe national institution that issues a country's currency, sets the main interest rate and works to keep prices and the financial system stable.
  • monetary policyThe actions a central bank takes to influence interest rates, the money supply and credit in order to control inflation and support the economy.
  • core inflationA measure of inflation that leaves out the most volatile prices, usually food and energy, to show the underlying trend in prices.
  • forecastAn estimate of future economic figures, such as growth, inflation or unemployment, based on data and models; it is also used as a verb.

More terms: Central Banks and Interest Rates

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