Retail inflation increased to 6.21% in October, highest in 14 months, prices of food items increased
New Delhi. Due to cost of food items, retail inflation has increased to 6.21 percent in October. This is the highest level of inflation in 14 months. Inflation in August 2023 was 6.83 percent. Whereas in September, a month before October, it had reached 5.49 percent due to the cost of vegetables.
Food items contribute about 50 percent to the inflation basket. Its inflation has increased from 9.24 percent to 10.87 percent on month-on-month basis. Whereas rural inflation has increased from 5.87 percent to 6.68 percent and urban inflation has increased from 5.05 percent to 5.62 percent.
How does inflation affect?
Inflation is directly related to purchasing power. For example, if the inflation rate is 6%, then the value of Rs 100 earned will be only Rs 94. Therefore, investment should be made only keeping inflation in mind. Otherwise the value of your money will reduce.
Inflation increases and decreases like this
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. Apart from crude oil, commodity prices, manufacturing cost, there are many other things which play an important role in determining the retail inflation rate. There are about 300 items on the basis of whose prices the retail inflation rate is decided.
Source : palpalindia
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