image

Inflation

About Inflation

Facebook IconLinkedIN Icon

What is Inflation

Inflation can be defined as a persistent rise in the general price of goods and services of common or daily use — such as clothing, food, fuel, transport, etc — which results in an increase in the cost of living.
 
Inflation is the measure of change in average price of services and commodities, done at regular intervals. It indicates a decrease in the purchasing power of a unit of a nation’s currency as the products and services get more expensive. Basically, inflation is the difference between aggregate demand and aggregate supply of goods and services. When aggregate demand exceeds the supply of goods at current prices, there is a rise in the price level.
 
A certain level of inflation is required in the economy to ensure that expenditure is promoted and money hoarding through savings is discouraged.
 
How is inflation measured?
 
In India, there are two main sets of inflation indices to measure changes in price levels — Consumer Price Index (CPI) and Wholesale Price Index (WPI). These indices measure changes at the retail and wholesale price levels, respectively. CPI tracks any shift in retail prices of essential and daily goods and services consumed by households across the country. In short, it captures changes in price level at the consumer level.
 
WPI, on the other hand, is the average change in the price of commodities at the wholesale level. It considers the price of goods traded among corporations, not goods purchased by consumers. The aim of WPI is to monitor price drifts that reflect demand and supply in manufacturing, industry and construction. 
 

Latest Updates on Inflation

Will continue to prioritise inflation, says RBI governor Sanjay Malhotra

"We have to watch out for monsoon… how it progress because a significant population depends on agriculture," he said

Updated On: 17 Jul 2026 | 10:37 PM IST

West Asia tensions, weak monsoon key risks for Indian economy: RBI Governor

RBI Governor Sanjay Malhotra said inflation risks remain elevated due to West Asia tensions, rising oil prices and the possibility of a weak monsoon, even as supply-side pressures dominate

Updated On: 17 Jul 2026 | 11:00 AM IST

I-T department raises Cost Inflation Index for current fiscal to 384

The CBDT has raised the Cost Inflation Index to 384 for FY27, helping taxpayers compute inflation-adjusted long-term capital gains on eligible assets

Updated On: 16 Jul 2026 | 7:47 PM IST

CBDT raises Cost Inflation Index to 384 for financial year 2026-27

The Cost Inflation Index for FY27 will apply from April 1, 2026, though indexation is now available only in limited cases involving certain land and building sales

Updated On: 16 Jul 2026 | 1:33 PM IST

CBDT notifies Cost Inflation Index for FY2026-27 at 384. What it means

A higher index means the inflation-adjusted cost of acquiring an asset will be higher than it was in FY26

Updated On: 16 Jul 2026 | 11:42 AM IST

Fed's Lisa Cook says ready to act if inflation does not cool soon

Federal Reserve Governor Lisa Cook said inflation risks now outweigh labour market concerns and signalled she is prepared to act if disinflation does not resume soon

Updated On: 16 Jul 2026 | 12:14 AM IST

Old health cover may leave you underinsured as medical costs rise

Review the sum insured at every renewal, upgrade while healthy, and use a super top-up to raise cover affordably

Updated On: 15 Jul 2026 | 3:25 PM IST

Gold may hit $5k on easing geopolitical risks: Kaynat Chainwala, Kotak Sec

Gold's near-term direction depends on whether June CPI marks the start of a durable disinflation trend or a temporary pullback driven by energy base effects.

Updated On: 15 Jul 2026 | 3:11 PM IST

US consumer inflation slows 0.4% in June, but Fed rate hike fears linger

US consumer inflation eased more than expected in June as energy prices retreated, though markets still see a possibility of a Federal Reserve rate increase this year

Updated On: 14 Jul 2026 | 10:01 PM IST

India's retail inflation breaches RBI target to hit 4.38% in June

Fuel costs lift food prices; experts don't expect rate hike

Updated On: 13 Jul 2026 | 11:29 PM IST

A new index at the factory gate: Why India's PPI matters beyond inflation

After more than two decades in the making, India's Producer Price Index is beginning to reshape industrial output, GDP measurement and the country's broader statistical framework

Updated On: 13 Jul 2026 | 9:49 PM IST

A few officials saw case for June rate hike: Federal Reserve minutes

Fed minutes show some officials considered a rate hike as persistent inflation, energy prices and AI-driven demand kept pressure on the US interest-rate outlook

Updated On: 09 Jul 2026 | 10:37 PM IST

India's consumer inflation likely rose above RBI's 4% target in June: Poll

This would also be the highest inflation reading since India introduced its revised consumer price index series with a new base year and updated consumption basket in January

Updated On: 09 Jul 2026 | 1:38 PM IST

IMF trims India's FY27 growth forecast to 6.4% from 6.5% in April

The IMF has cut India's FY27 growth forecast to 6.4 per cent, saying higher energy prices outweigh resilient economic activity, while raising its FY28 projection

Updated On: 09 Jul 2026 | 12:04 AM IST

US job growth misses expectations in June; unemployment rate falls to 4.2%

US job growth slowed sharply in June, but the unemployment rate fell to 4.2%, suggesting the labour market remains resilient despite weaker hiring

Updated On: 02 Jul 2026 | 6:53 PM IST

War-led input cost hikes impacted Q1: HUL chairman Nitin Paranjpe

HUL chairman says higher commodity costs following the West Asia conflict will weigh on Q1, but expects easing ahead and says the company remains well placed to manage short-term volatility

Updated On: 30 Jun 2026 | 11:47 PM IST

Inflation may remain relatively contained in coming months: FinMin report

The report said the cessation of the conflict in West Asia had also brightened the growth outlook and reduced external deficit risks

Updated On: 30 Jun 2026 | 11:15 PM IST

Beyond chips, IMF warns AI wealth boom could fuel inflation risks

Booming technology stocks are swelling retirement accounts and investment portfolios, leaving consumers feeling richer and more willing to spend on vacations, homes and other big-ticket purchases

Updated On: 27 Jun 2026 | 9:07 AM IST

Goldman Sachs lifts FY27 India growth forecast to 6.5% as oil price easing

Brokerage cites easing oil prices after the US-Iran peace deal, raises India's FY27 growth forecast to 6.5% and lowers headline inflation projection to 4.9%

Updated On: 26 Jun 2026 | 8:51 PM IST

Best of BS Opinion: Weather risks, state finances and Trump's economics

Today's opinions examine monsoon uncertainty, RBI's NBFC framework, worsening state finances, Donald Trump's economic approach and the future of modern feminism

Updated On: 26 Jun 2026 | 6:15 AM IST