Consumer Price Index (CPI)
The Consumer Price Index is a widely used economic indicator reflecting the average change in prices over a period of time that consumers pay in exchange for goods and/or services. CPI is commonly used in measuring inflation and the effectiveness of the government’s economic policy. Hence, it serves as a guide to making informed decisions about the economy.
The CPI figures cover professionals, self-employed, unemployed, indigent, and retired individuals in the country. The CPI report, however, does not cover rural populations, farm families, armed forces, prisoners, and mental hospital patients.
The CPI formula is Cost of Market Basket in Given Year/Cost of Market Basket in Base Year x 100.