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Inflation

About Inflation

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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

Rising yields, inflation to keep FY27 corporate bond issuances subdued

Corporate bond issuances likely to remain subdued in FY27 as elevated yields, inflation risks and liquidity conditions weigh on fundraising activity and investor appetite

Updated On: 03 Apr 2026 | 11:23 PM IST

Crude sustaining above $100 will push inflation beyond 6%, says HSBC

Amid speculation ahead of next Wednesday's monetary policy announcement on whether the RBI uses interest rates to defend the rupee, the report suggested risks of such a move

Updated On: 03 Apr 2026 | 6:26 PM IST

Best of BS Opinion: All eyes on RBI's policy meeting amid Iran conflict

From Sebi's governance gaps and inflation targeting to investor protection concerns, AI-led consumer insights, and evolving global discourse, today's BS Opinion offers sharp perspectives

Updated On: 31 Mar 2026 | 6:15 AM IST

Inflation dynamics: Ongoing Iran conflict will complicate policy choices

Research has shown that both the inflation rate and volatility moderated after the adoption of the flexible inflation-targeting framework

Updated On: 30 Mar 2026 | 10:39 PM IST

First time in this rate cycle, RBI faces growth-inflation dilemma

The going was good until war in West Asia started. The inflation rate was low with growth staying robust

Updated On: 29 Mar 2026 | 11:02 PM IST

Expedite WPI base year revision, says Parliamentary panel report

Committee asks DPIIT to align WPI with revised GDP, CPI and IIP series, and roll out producer price indices to improve price measurement and data accuracy

Updated On: 24 Mar 2026 | 11:24 PM IST

No formal study on GST rate rationalisation's inflation impact: Govt

Government says no formal study has assessed GST rate rationalisation's inflation impact; GST revenue rose 8.1% in February, with rural consumption showing strong gains

Updated On: 24 Mar 2026 | 12:22 AM IST

Retirement portfolio beyond FDs: Diversify for inflation, longevity risks

The entire retirement corpus will not be needed on day one, so it should be split into growth and income-generation buckets to manage inflation and longevity risks

Updated On: 19 Mar 2026 | 9:56 PM IST

ECB holds rates as West Asia conflict clouds growth, inflation outlook

"The war in the Middle East...will have a material impact on near-term inflation through higher energy pricesm," the ECB said

Updated On: 19 Mar 2026 | 8:02 PM IST

US Fed holds rates, signals one cut in 2026 despite higher inflation

Inflation, as measured by the Fed's preferred gauge, was expected to end the year at 2.7 per cent , not far below its current rate and higher than the 2.4 per cent projected in December

Updated On: 19 Mar 2026 | 1:03 AM IST

Fewer episodes of rate hike in inflation target regime, says SBI report

SBI report says India has seen fewer instances of interest rate hikes since the flexible inflation targeting regime began, with the third five-year phase set to start next month

Updated On: 16 Mar 2026 | 11:31 PM IST

WPI inflation at 11-month high of 2.13% in February, shows govt data

Factory-gate inflation rises to an 11-month high in February, driven by higher prices of primary goods and manufactured products, while fuel and power remain in deflation

Updated On: 16 Mar 2026 | 10:51 PM IST

RBI's clarity of communication will be as critical as the policy itself

In inflation-targeting economies such as India, communication is a key instrument of monetary policy

Updated On: 16 Mar 2026 | 10:39 PM IST

Statsguru: Economic strain in the shadow of rising West Asia conflict

Periods of major wars - both global and regional - have frequently aligned with spikes in India's inflation

Updated On: 15 Mar 2026 | 10:36 PM IST

Stabilising the Indian economy: Why currency depreciation is a good idea

Inflation targeting plus floating exchange rate plus open capital account

Updated On: 15 Mar 2026 | 10:29 PM IST

Costlier oil could lift inflation, slow India's growth in H1FY27: Fitch

Persistently high oil prices could push up retail inflation faster than expected and slow India's economic growth in the first half of FY27, Fitch Ratings said in its latest outlook

Updated On: 13 Mar 2026 | 11:58 PM IST

February retail inflation rises to 3.21% from 2.74% in Jan on new series

CPI inflation increased by 47 basis points year-on-year in February, data showed

Updated On: 12 Mar 2026 | 5:37 PM IST

Cooking gas crunch in India fuels inflation fear as Iran war widens

The gas crunch is rippling through the economy, raising fears about a spike in prices and a drop in output in some sectors

Updated On: 12 Mar 2026 | 10:08 AM IST

Impact of rising crude prices on inflation won't be substantial: FM

Finance Minister Nirmala Sitharaman, in a written statement, said that the medium-term impact of global crude oil price rise on inflation would depend upon several factors

Updated On: 09 Mar 2026 | 10:29 PM IST

Central banks across Europe face rising rate hike bets amid Iran war

The unusually sharp repricing came as major oil producers cut supply and fears grew of prolonged shipping disruptions, pushing crude above $119 a barrel its highest level since mid-2022

Updated On: 09 Mar 2026 | 5:24 PM IST