CPI Inflation
Consumer Price Index Inflation
MacroeconomicsThe rate of change in the prices of a consumption basket of goods and services. India's monetary policy targets CPI inflation at 4%, within a 2 to 6% band.
Formula
Inflation = (CPI now - CPI year ago) / CPI year ago
Why it matters
CPI drives RBI policy and erodes real returns. Every nominal return must be judged against it to know what purchasing power actually grew.
Indian example
Related terms
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