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Inflation

About Inflation

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What is Inflation

Inflation can be defined as a persistent rise in the general price of goods and services of common or daily use — such as clothing, food, fuel, transport, etc — which results in an increase in the cost of living.
 
Inflation is the measure of change in average price of services and commodities, done at regular intervals. It indicates a decrease in the purchasing power of a unit of a nation’s currency as the products and services get more expensive. Basically, inflation is the difference between aggregate demand and aggregate supply of goods and services. When aggregate demand exceeds the supply of goods at current prices, there is a rise in the price level.
 
A certain level of inflation is required in the economy to ensure that expenditure is promoted and money hoarding through savings is discouraged.
 
How is inflation measured?
 
In India, there are two main sets of inflation indices to measure changes in price levels — Consumer Price Index (CPI) and Wholesale Price Index (WPI). These indices measure changes at the retail and wholesale price levels, respectively. CPI tracks any shift in retail prices of essential and daily goods and services consumed by households across the country. In short, it captures changes in price level at the consumer level.
 
WPI, on the other hand, is the average change in the price of commodities at the wholesale level. It considers the price of goods traded among corporations, not goods purchased by consumers. The aim of WPI is to monitor price drifts that reflect demand and supply in manufacturing, industry and construction. 
 

Latest Updates on Inflation

Over the past few years, wage growth has consistently trailed both general and food inflation rates, with the exceptions of FY21 and FY24

Updated On: 22 Dec 2024 | 8:00 PM IST

The UK's central bank is set to keep interest rates on hold later Thursday as inflation has moved further above its target rate, even though the British economy is flatlining at best.

Updated On: 19 Dec 2024 | 4:53 PM IST

After the substantial reduction in interest rates, triggered by the return of inflation to the bank's target this year, BoC Governor Tiff Macklem indicated last week that further cuts would be more

Updated On: 17 Dec 2024 | 7:29 PM IST

Patra highlighted that digitalisation can be regarded as a long-term technology shock impacting economic growth, productivity, labour markets, older technologies, and inflation

Updated On: 16 Dec 2024 | 11:27 PM IST

You have come at a time when the growth-inflation dynamics is changing and the rupee is under pressure

Updated On: 15 Dec 2024 | 5:02 PM IST

'We cannot be stuck. We have to be agile while maintaining policy continuity,' Sanjay Malhotra said in his first address as RBI governor

Updated On: 11 Dec 2024 | 4:26 PM IST

Malhotra's appointment comes as economic growth has slowed and inflation has risen

Updated On: 10 Dec 2024 | 7:03 PM IST

Outgoing RBI Governor Shaktikanta Das reflects on six years at the helm as Sanjay Malhotra prepares to take over

Updated On: 10 Dec 2024 | 1:31 PM IST

World's second-largest economy is bracing for likely fresh tariffs from a second Donald Trump White House and still dealing with other headwinds, suggesting more policy stimulus will be needed

Updated On: 09 Dec 2024 | 9:29 AM IST

Says that geopolitics will be the most important driver of financial markets in 2025

Updated On: 09 Dec 2024 | 8:02 AM IST

Industry experts, however, note that the exercise is also undertaken by automakers every year in December to shore up sales volume in the last month of the year

Updated On: 08 Dec 2024 | 1:49 PM IST

Since higher customs duties will result in the US suffering inflation, it's also possible the US Federal Reserve will review its stated policy of policy rate cuts

Updated On: 06 Dec 2024 | 10:58 PM IST

Maintains neutral stance; sets stage for Feb rate action

Updated On: 06 Dec 2024 | 11:43 PM IST

Consumer confidence dips marginally

Updated On: 06 Dec 2024 | 9:44 PM IST

Consumer price index (CPI)-based inflation increased sharply in September and October 2024 led by an unanticipated increase in food prices

Updated On: 06 Dec 2024 | 1:48 PM IST

Reserve Bank of India Monetary Policy Committee: Food prices likely to keep headline inflation up in the near future

Updated On: 06 Dec 2024 | 10:10 AM IST

"It is also necessary to curb inflation, which is currently at a fairly high level," Putin told an international investment conference organised by Russia's second-largest lender VTB in Moscow

Updated On: 04 Dec 2024 | 7:42 PM IST

May cut cash reserve ratio, lower growth and inflation projections

Updated On: 01 Dec 2024 | 11:30 PM IST

This is Iceland's sixth general election since the 2008 financial crisis devastated the economy of the North Atlantic island nation and ushered in a new era of political instability

Updated On: 30 Nov 2024 | 3:27 PM IST

Growth worries got new emphasis after surveys of purchasing managers compiled by S&P Global showed the eurozone economy was contracting in October

Updated On: 29 Nov 2024 | 5:06 PM IST