Daily News Analysis

Retail Inflation

14th January, 2022 Economy

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Context:

  • India's benchmark inflation rate, measured by the Consumer Price Index (CPI), settled at 5.59% year-on-year in December 2021, as data released by the Ministry of Statistics and Program Implementation show.

about inflation

  • The CPI remains within the RBI tolerance threshold for 6 consecutive months.
  • The Monetary Policy Committee officially requires interest rate setting agencies to keep inflation within the 6% range and the medium-term target at 4%.
  • CPI-based inflation Retail prices for goods and services: When we talk about inflation, we often refer to inflation based on the consumer price index (CPI).
  • CPI tracks changes in the retail price of goods and services that households buy for daily consumption.
  • When prices fall, it is called deflation (negative inflation).
  • The Central Bank (RBI) pays close attention to this number in its role in maintaining price stability in the economy.
  • The CPI also helps you understand salaries, wages, the actual value of your pension, the purchasing power of your home currency, the rate of regulation, and more.
  • CPI formula: (basket price for the current period / basket price for the base period) x 100