Inflation

In economics, the inflation rate is a measure of inflation, the rate of increase of a price index (for example, a consumer price index). It is the percentage rate of change in price level over time.[1] The rate of decrease in the purchasing power of money is approximately equal.

The inflation rate is used to calculate the real interest rate, as well as real increases in wages

Description of the rate: The rate is usually expressed in annualized terms, though the measurement periods are usually different from one year. Inflation rates are often given in seasonally adjusted terms, removing systematic quarter-to-quarter variation

If P₀ is the current average price level and P _{− 1} is the price level a year ago, the rate of inflation during the year might be measured as follows:

Inflation Rate = {(P0 - P-1)/P-1}*100%

After the year the purchasing power of a unit of money is multiplied by a factor 1 / ( 1 + inflation rate ).

There are other ways of defining the inflation rate, such as logP₀ − logP _{− 1} (using the natural log), again stated as a percentage. In this case after the year the purchasing power of a unit of money is multiplied by a factor e ^{− inflation rate}.

There are two general methods for calculating inflation rates - one is to use a base period, the other is to use "chained" measurements. Chained measurements adjust not only the prices, but the contents of the market basket involved, with each price period. More common, however, is the base period reference. This can be seen from inflation reports from the "relative weight" assigned to each component, and by looking at the technical notes to see what each item in an inflation basket represents and how it is calculated.

India Inflation Rate

The inflation rate in India was last reported at 8.33 percent in November of 2010. From 1969 until 2010, the average inflation rate in India was 7.99 percent reaching an historical high of 34.68 percent in September of 1974 and a record low of -11.31 percent in May of 1976. Inflation rate refers to a general rise in prices measured against a standard level of purchasing power. The most well known measures of Inflation are the CPI which measures consumer prices, and the GDP deflator, which measures inflation in the whole of the domestic economy. This page includes: India Inflation Rate chart, historical data and news.