WPI, CPI, Core Inflation — Current Affairs 2026
Current Affairs Connections
RBI maintains repo rate at 6.5% citing core inflation concerns
December 2024The RBI's December 2024 monetary policy decision highlighted the divergence between headline CPI inflation (around 5.5%) and core inflation (around 3.2%). This divergence influenced the MPC's decision to maintain status quo, as core inflation remaining within the target range suggested that headline inflation was primarily driven by food price volatility rather than broad-based demand pressures. This demonstrates the practical application of core inflation in monetary policy decisions.
UPSC Angle: Expect questions on how RBI uses core inflation vs headline inflation in policy decisions, and why food price volatility doesn't always trigger monetary policy response.
WPI deflation continues for third consecutive month while CPI remains elevated
November 2024The persistent WPI-CPI divergence in late 2024 reflected global commodity price corrections affecting wholesale markets while domestic consumer prices remained sticky due to services inflation and local demand pressures. This divergence highlighted structural issues in India's price transmission mechanism and the importance of using appropriate inflation measures for different policy purposes.
UPSC Angle: Questions may focus on explaining WPI-CPI divergence, its causes, and implications for different stakeholders - producers vs consumers, exporters vs domestic market players.