CPI inflation quickens to six-month high of 2.92% on food, fuel prices

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  1. 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.
  2. 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.
  3. 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.
  4. RBI has adopted CPI as the key measure for determining inflation situation of Indian economy on the recommendation of Urjit Patel Committee.
  5. 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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