What is CPI and WPI?

What is CPI and WPI?

Consumer Price Index (CPI): The Consumer Price Index measures changes in the average price level of goods and services purchased by households over time. It is used to measure inflation and indicates the cost of living for consumers. The CPI is calculated by selecting a basket of goods and services that represent typical consumer purchases and tracking the changes in their prices over time. This index is often used to adjust wages, pensions, and government benefits to account for changes in purchasing power.

Wholesale Price Index (WPI): The Wholesale Price Index measures changes in the average price level of goods traded in bulk or at the wholesale level. It primarily serves as an indicator of inflation in the production and distribution stages of the economy. WPI tracks the price changes of goods before they reach the retail level and includes commodities such as raw materials, intermediate goods, and finished goods. Policymakers, businesses, and analysts use WPI to monitor inflationary pressures within the economy and make decisions based on price trends in the wholesale market.