How to calculate the inflation index

Inflation is the depreciation of money. It occurs when the average income of the population remains unchanged, but there is a constant increase in prices for food and industrial goods. The inflation index is an economic indicator that allows you to get a numerical description of the inflationary process.

Instruction manual

1

The inflation index has the same essence as the price index, but they both differ from the producer price index, the GDP deflator index, and even the consumer price index, because they have a different composition of services, goods and goods taken into account in their calculations. It is necessary to calculate the inflation index taking into account the so-called consumer basket.

2

A consumer basket is a list of goods, products, and a minimum set of services that are most important from a household point of view. This list is not accidental - it is approved by the decision of the Federal State Statistics Service for a certain period of time. Using the price index, you can track the inflationary (or deflationary) processes occurring during the study period in the country. The higher this indicator, the greater the economic burden placed on the shoulders of the population and the state itself.

3

Statistics on the value of the consumer basket are published in the open press every quarter. You can determine them yourself by visiting the nearest stores and recording at the beginning of the study period. At the end, you will again go to the same shops and write down new prices for the same goods. Add up the initial prices - this will be the base cost of the consumer basket (SPKb). Add up the prices at the end of the period - this will be the current value of the consumer basket (SPKt).

4

The inflation index is the ratio of the base and current value of the consumer basket, calculate it according to the formula: AI = SPKb / SPKt.

5

The inflation index is used in many economic calculations, with its help dynamic changes are determined: the rate of inflation, the decline in real incomes of the population, the level of decline in the quality of life. Using that indicator of the inflation index, which was obtained independently, you can then compare it with the official data that Rosgosstat publishes in its reports.