What is WPI CPI? How is WPI CPI Calculated?

What is WPI CPI? How is WPI CPI Calculated?

Some economic indicators are needed to understand and manage a country's finances. These economic indicators are the main tools used to evaluate inflation by measuring changes in the markets and to guide economic policies.

When it comes to inflation in Turkey, the first things that come to mind are the CPI and WPI indices.

So, what is this WPI CPI?

Let's talk about what is curious about WPI CPI and how WPI CPI calculations are made in this content.

What is CPI?

CPI is the name given to the index that calculates the general price level in a country. Taking a specific period as a reference, changes in the prices of goods and services that consumers frequently purchase are observed.

The CPI (Consumer Price Index) is widely used to understand the cost of living for consumers and to assess economic conditions in a country.

What is WPI?

The WPI (Consumer Price Index), which is a variant of the CPI, can also be referred to as a more comprehensive version of the CPI. Covering consumers living in cities and smaller regions in particular, the WPI usually takes a broader view of price changes across the country. In short, WPI is also expressed as an economic evaluation of different regions and differences in living conditions.

How is WPI and CPI Calculated?

The calculation of both indices, WPI and CPI, follows similar procedures. When WPI - CPI calculations are made, a specific good or service is selected, the prices of the selected good or service are collected for certain periods, and calculations are made by comparing the current period prices with the reference period prices. These calculations usually cover basic categories such as food, housing, transportation, entertainment, etc. and the calculations are carried out monthly or quarterly.

Why are WPI and CPI Calculations Important?

WPI and CPI are of great importance for controlling inflation, protecting the purchasing power of consumers and the healthy growth of the economy. On the other hand, WPI and CPI, which play an important role in the formulation and evaluation of economic policies, should be monitored regularly.

Since WPI and CPI are complementary indices, they provide more comprehensive information about the economy when evaluated together.

However, it should be noted that both indices have certain limitations and should be used in conjunction with other economic indicators.

If WPI-CPI calculations are made in line with these criteria, it will be possible to make the most accurate economic analysis and make effective decisions on the national economy.

The concepts of WPI - CPI, which are used for many issues such as measuring inflation, evaluating economic policies and evaluating the purchasing power of consumers, also serve as a very important compass to maintain economic balance in a society and to increase the welfare level of the society.

It is also important for anyone who wants to have information about the economy to know these indices and to be able to make WPI - CPI calculations.

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