Inflation

Why is it in the news
  • As per the recent data released, retail inflation quickened in March to 2.86% from 2.57% in February, driven in large part by the food and fuel sectors.
More in the news
    • The retail inflation, as measured by the consumer price index (CPI), quickened due to a speeding up of inflation in the food and fuel sectors.
    • Inflation in the food and beverages segment of the CPI quickened to 0.66% in March compared with a contraction of 0.07% in February.
    • However, the Inflation is still well below the average threshold of 4%.
    • Inflation levels in all the other segments of the CPI came in lower, however.
    • Inflation in the pan and tobacco segment came in at 4.61% in March compared with 5.49% in February.
    • The rate of price rise slowed in the clothing and footwear segment as well, coming in at 2.59% compared with 2.73% over the same period.
    • Inflation:
      (1) Inflation is defined as a sustained increase in the general level of prices for goods and services in a county.
      (2) Demand-Pull Inflation – Inflation is caused by the overall increase in demand for goods and services, which bids up their prices.
      (3) This theory can be summarized as "too much money chasing too few goods". In other words, if demand is growing faster than supply, prices will increase.
      (4) Cost-Push Inflation – Inflation is caused when companies' costs of production go up. When this happens, they need to increase prices to maintain their profit margins.
      (5) Increased costs can include things such as wages, taxes, or increased costs of natural resources or imports
    Source
    The Hindu.




    Posted by Jawwad Kazi on 13th Apr 2019
    << Previous Next >>