Context: Retail inflation accelerated sharply to 6.95% in March, the fastest pace of price gains in almost a year and a half, and marked the third straight month when inflation exceeded the Reserve Bank of India’s tolerance threshold of 6%.
What is retail inflation?
Retail inflation tracked by the Consumer Price Index (CPI) measures the changes in prices from a retail buyer’s perspective.
Wholesale inflation, which is tracked by the Wholesale Price Index (WPI), measures inflation at the level of producers.
What Is the Consumer Price Index (CPI)?
The Consumer Price Index (CPI) is a measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food and medical care.
It is calculated by taking price changes for each item in the predetermined basket of goods and averaging them.
Changes in the CPI are used to assess price changes associated with the cost of living;
The CPI is one of the most frequently used statistics for identifying periods of inflation or deflation.
