Describe how to calculate the inflation rate in your learning language. Currently, almost all countries facing an economic crisis, some in the shape of an energy crisis while others are due to a shortage of food. The coronavirus and the recent Russia-Ukraine war have further exacerbated the situation. And inflation has become a buzzword, often appearing in the news and on social media. What exactly inflation is and how it is calculated, in this post, will be dwelled upon precisely. First of all, inflation is often defined as a rise in commodity prices. However, there are many other factors that are important to take into account while defining inflation. A country's trade balance, imports and exports, currency appreciation or devaluation, interest rate, and global trade environment—all of these factors increase or decrease inflation. To measure it, the indicators are calculated with a specific value given to each indicator.