Real interest rate (%)

The real interest rate represents the cost of borrowing money after accounting for inflation, reflecting the true purchasing power of lenders and borrowers. This metric is crucial for understanding economic conditions, as it influences consumer spending, investment decisions, and savings behavior. While the calculation typically uses the GDP deflator to adjust nominal interest rates, variations in lending terms and market structures across different countries can complicate cross-national comparisons. As a result, this indicator not only provides insights into monetary policy effectiveness but also highlights the intricacies of global finance, illustrating how regional economic contexts can shape financial outcomes and influence overall economic growth. Source: