What is CPI: Consumer price index

The CPI is an economic index calculated as the weighted average of consumer goods and services in a basket. It is used to measure the level of inflation or deflation in a country. CPI gives an idea about the state of the economy in a country and is used by governments whilst considering economic policy measures. Inflation is echoed in an increase in price of the consumer goods and services, and thereby the weakening of the local currency’s purchasing power.