RBI Estimated the CPI Inflation at 4.5% for FY25
Inflation: The Reserve Bank of India( RBI)’s Monetary Policy Committee (MPC) estimated the CPI inflation to be 4.5% for FY25, with fluctuations across quarters. The RBI projected the inflation in the first quarter (April-June) at 4.9 per cent, which was before 5 per cent. The fourth quarter (January-March) is estimated at 4.5 per cent, which was before the 4.7 per cent forecast. The inflation forecast for FY25 remained unchanged at 4.5 per cent.
Reserve Bank Of India
How does the Reserve Bank Of India Calculate the Inflation Rate?
In India, the Wholesale Price Index (WPI) and the Consumer Price Index (CPI) are used to measure inflation (CPI). The Reserve Bank of India (RBI) calculates the inflation rate primarily using the Consumer Price Index (CPI) as one of its key indicators. CPI measures the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. The RBI focuses on the CPI for specific categories such as food, fuel, and other essential commodities, as well as the overall CPI, to gauge inflationary trends.
The RBI also considers other factors such as the Wholesale Price Index (WPI), which measures the change in the price of goods at the wholesale level. However, CPI is often considered a more accurate reflection of inflation experienced by consumers. Once the RBI gathers data on CPI and other relevant indices, it analyzes the trends and calculates the inflation rate, which is then used to formulate monetary policy decisions. These decisions could include adjusting interest rates or implementing other measures aimed at controlling inflation within a target range.
India Inflation Trends
| Year | Inflation Rate (%) | Annual Change |
|---|---|---|
| 2022 | 6.70% | 1.57% |
| 2021 | 5.13% | -1.49% |
| 2020 | 6.62% | 2.89% |
| 2019 | 3.73% | -0.21% |
| 2018 | 3.94% | 0.61% |
| 2017 | 3.33% | -1.62% |
| 2016 | 4.95% | 0.04% |
| 2015 | 4.91% | -1.76% |
| 2014 | 6.67% | -3.35% |
| 2013 | 10.02% | 0.54% |
| 2012 | 9.48% | 0.57% |
| 2011 | 8.91% | -3.08% |
| 2010 | 11.99% | 1.11% |
| 2009 | 10.88% | 2.53% |
| 2008 | 8.35% | 1.98% |
| 2007 | 6.37% | 0.58% |
| 2006 | 5.80% | 1.55% |
| 2005 | 4.25% | 0.48% |
| 2004 | 3.77% | -0.04% |
| 2003 | 3.81% | -0.49% |
| 2002 | 4.30% | 0.52% |
| 2001 | 3.78% | -0.23% |
| 2000 | 4.01% | -0.66% |
| 1999 | 4.67% | -8.56% |
| 1998 | 13.23% | 6.07% |
| 1997 | 7.16% | -1.81% |
| 1996 | 8.98% | -1.25% |
| 1995 | 10.22% | -0.02% |
| 1994 | 10.25% | 3.92% |
| 1993 | 6.33% | -5.46% |
| 1992 | 11.79% | -2.08% |
| 1991 | 13.87% | 4.90% |
| 1990 | 8.97% | 1.90% |
| 1989 | 7.07% | -2.31% |
| 1988 | 9.38% | 0.58% |
| 1987 | 8.80% | 0.07% |
| 1986 | 8.73% | 3.17% |
| 1985 | 5.56% | -2.76% |
| 1984 | 8.32% | -3.55% |
| 1983 | 11.87% | 3.98% |
| 1982 | 7.89% | -5.22% |
| 1981 | 13.11% | 1.77% |
| 1980 | 11.35% | 5.07% |
| 1979 | 6.28% | 3.75% |
| 1978 | 2.52% | -5.78% |
| 1977 | 8.31% | 15.94% |
| 1976 | -7.63% | -13.38% |
| 1975 | 5.75% | -22.85% |
| 1974 | 28.60% | 11.66% |
| 1973 | 16.94% | 10.50% |
| 1972 | 6.44% | 3.36% |
| 1971 | 3.08% | -2.01% |
| 1970 | 5.09% | 5.68% |
| 1969 | -0.58% | -3.82% |
| 1968 | 3.24% | -9.82% |
| 1967 | 13.06% | 2.26% |
| 1966 | 10.80% | 1.33% |
| 1965 | 9.47% | -3.88% |
| 1964 | 13.36% | 10.41% |
| 1963 | 2.95% | -0.69% |
| 1962 | 3.63% | 1.94% |
| 1961 | 1.70% | -0.08% |
| 1960 | 1.78% | -0.08% |
Who determines the inflation rate in India?
In India, the government sets the inflation target in consultation with the Reserve Bank of India (RBI). The government typically establishes an inflation target once every five years. However, the responsibility for implementing policies to control inflation lies primarily with the RBI. The RBI uses various monetary policy tools, such as adjusting interest rates and liquidity measures, to achieve the inflation target set by the government.
