- According to the data released from the Central Statistics Office (CSO), retail inflation for the month of January has increased to a six month high of 2.92%.This has been primarily due to increase in food prices including vegetables, meat, fish and eggs.
- Retail inflation is based on the Consumer Price Index (CPI).CPI measures changes in the price level of a market basket of consumer goods and services purchased by households.The CPI is a statistical estimate constructed using the prices of a sample of representative items whose prices are collected periodically.
- The annual percentage change in a CPI is used as a measure of inflation.Recently,base year of the Consumer Price Index (CPI) has been revised from 2010 to 2012.
- RBI has adopted CPI as the key measure for determining inflation situation of Indian economy on the recommendation of Urjit Patel Committee.
- However,Core Inflation has seen a downward trend.Core inflation demonstrates inflation apart from temporary shocks and volatility.It is measured using the CPI by excluding food and fuel components as their prices are highly volatile.
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