The school subject Mathematical Literacy requires application of mathematics procedures in various contextual settings, but not much is known about the ways in which students engage with contextual settings such as inflation. This qualitative study was conducted with in-service Mathematical Literacy teachers in South Africa with the purpose of exploring the extent to which the teachers recognised the contextual constraints involved in applying the percentage change calculation to the inflation context. The written responses of the 406 Mathematical Literacy teachers were scrutinised to identify their interpretations of the contextual constraints involved in applying the percentage change procedure to the context of inflation. The item required the application of two successive percentage change operations (corresponding to the inflation rates for the 2 years). Of the 406 responses that were analysed, 260 (65%) were unable to take account of all the contextual constraints. There were 108 teachers who reduced the procedure to a one-step calculation while 64 teachers interpreted the context as a percentage decrease scenario. A large number of teachers (162) struggled with the interpretation of the role of the year, k, in the relationship between the quantities. The findings indicate that engagement with and understanding of the concept of inflation is dependent on a synthesis of the contextual constraints into the mathematical procedures. This article provides some insights into the struggles with making sense of the contextual nature of inflation which is an area that has received little attention in mathematics education studies. The teachers' struggles likely mirror learners' struggles and hence the research applies in a similar way to learners.