Interest rates are a hot topic in 2025, with major economies navigating inflationary pressures and the loosening end of their monetary policy cycles.
Real interest rates, calculated by subtracting inflation from nominal policy rates, can show the true incentive to spend or save.
When real interest rates are low, businesses borrow more and consumers spend more, boosting economic activity. By contrast, high real rates incentivize saving and tighten financial conditions.
This infographic uses data from the IMF’s World Economic Outlook for April 2025 to highlight the current state of real interest rates across major economies. Australia’s adjusted interest rate sits at 1.50%.
