Number Theory: Making sense of latest CPI and WPI numbers | Latest News India - Hindustan Times
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Number Theory: Making sense of latest CPI and WPI numbers

Mar 14, 2024 07:34 PM IST

The numbers show that the future trajectory of inflation, and the prospect of an interest rate cut, is contingent on the prospect of farm prices coming down

We now have both retail and wholesale inflation numbers for February. While the Consumer Price Index (CPI) grew at 5.1% in February, the Wholesale Price Index (WPI) rose by just 0.2%. To be sure, the CPI and WPI baskets are very different in composition, and the difference in the two inflation measures is better understood as inflation facing consumers and producers, rather than inflation of similar commodities in the retail and wholesale markets. The CPI basket, for example, has a lot of services consumed by households, while the WPI one includes a lot of inputs used in industries. Having said this, what is the larger takeaway from the latest inflation numbers? Here are three charts which try and answer this question.

A farmer harvests vegetables at Marh village, outskirts of Jammu.(AP FILE PHOTO)
A farmer harvests vegetables at Marh village, outskirts of Jammu.(AP FILE PHOTO)

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