The Analyst's Path

Glossary

Consumer price index

M7.03 · M7.07

Also called CPI, consumer price inflation.

The index of prices paid by households, and the measure the Indian central bank targets.

Its composition determines its behaviour. Food carries a large weight in the Indian index, which makes the headline number volatile and sensitive to the monsoon in a way that developed-market indices are not.

That volatility is why the underlying measure exists, and why monetary policy commentary distinguishes the two so carefully.

Read the components, not only the headline.