New Delhi1 minute ago
- copy link
Retail inflation has come down to its lowest level in almost 8 years. It was 1.54% in September. The reason for this is the fall in the prices of some food items. Earlier in August it was 2.07%
The government has released the official figures of retail inflation today on October 13. The Reserve Bank (RBI) aims to keep inflation in the range of 4% ±2%.
Prices of food items decreased in September
- Food items contribute about 50% to the inflation basket. Its month-on-month inflation has declined from minus 0.64 to minus 2.28.
- Rural inflation rate has decreased from 1.69% to 1.07% in the month of September. Whereas urban inflation has come down from 2.47% to 2.04%.
How does inflation increase and decrease?
The rise and fall of inflation depends on the demand and supply of the product. If people have more money they will buy more things. Buying more things will increase the demand for things and if the supply is not as per the demand, the price of these things will increase.
In this way the market becomes vulnerable to inflation. Simply put, excessive flow of money in the market or shortage of goods causes inflation. Whereas if demand is less and supply is more then inflation will be less.
Inflation is determined by CPI
As a customer, you and I buy goods from the retail market. The work of showing the changes in prices related to this is done by the Consumer Price Index i.e. CPI. CPI measures the average price we pay for goods and services.
Source link
[ad_3]
