How to find the rate of inflation

How to find the rate of inflation

Inflation – depreciation of money and rise in price of life when for the same sum of money you, after a while, are able to gain smaller quantity of goods and services. It is statistical size therefore it can be calculated and found its numerical value. For its definition the indexes expressed as a percentage are used.


1. For calculation of inflation use, so-called, "consumer basket". It is the fixed list of the main goods and services necessary for life support of the person. The structure of a consumer basket is defined by a legislative image. Annually it is approved by Rosgosstat. Depending on in what state there is an economy, to a consumer basket consumer goods – foodstuff, clothes, footwear and services can be added or be withdrawn from it.

2. Data on inflation are published in media. But, first, they are published with some lateness, and, secondly, not always they cause trust. You also can learn the rate of inflation if you have data on the cost of a consumer basket for the beginning and the end of that period which interests you. So, there is a sense to learn real value of annual inflation and to compare it to those indicators which will be published in official sources of information.

3. Determine the cost of a consumer basket for the beginning of year. You can take average value of the price of any given food product in different shops or use only goods of one name and brand at a certain producer. Determine the total amount of goods and services in a consumer basket for this calendar year. Measure the cost of the same goods in the end of the year, find the cost of all consumer basket.

4. Define the index of inflation in a year (And). For this purpose divide the cost of a consumer basket on the end of the year (St12) into its cost at the beginning of a year (St0), subtract unit and increase by 100%, according to a formula: And = ((St12 – St0) – 1) * 100%.

5. It agrees the terminology accepted in statistics, the rate of inflation is defined depending on its index. If it is in limits of 10%, then inflation is called moderate. In case the index is ranging from 10 up to 100%, inflation is called galloping. When the index exceeds 100% - in the state a hyperinflation which is capable to destroy national economy, its industry and a banking system.

Author: «MirrorInfo» Dream Team