Consumer price inflation

Inflation is the general and progressive increase in level of prices of goods and services in an economy over a period of time. Consumer price inflation, on the other hand, usually refers to what is called the consumer price index (CPI), which is a measure estimating the average cost of all consumer goods and services purchased by a typical consumer.

The consumer price inflation, or consumer price index (CPI) , is a determinant of inflation. Significant change in the CPI usually means coming periods of either inflation or deflation. This is true even if the drop in the CPI is for a short time only.

Since inflation affects consumers, consumer price inflation is closely monitored by statistical agencies of countries all over the world. Due to the time consuming nature of measuring the CPI, it is usually computed only yearly, although some countries do so quarterly.