What is the wholesale price index?

, also known simply as WPI, wholesale price index is the current total price of the collection or heated wholesale goods, which are considered representative products commonly purchased in the country. It is not uncommon for governments to determine the content of these representative baskets and regularly check the current prices for these items. The information obtained from this strategy is often used to assess the current level of inflation in the economy of the nation. Some countries evaluate wholesale prices as often as every ten calendar days, while others perform a monthly index evaluation.

While a similar consumer price or CPI index, the wholesale prices index has a different focus. With the CPI, the task of evaluating the prices of selected products that are commonly purchased by individuals. On the other hand, the wholesale prices index focus on purchases and shops that are carried out between corporations. Monitoring this business activity among companies facilitates the determination of the presence of shiftsIn the offer and demand in industries based on the price movements of selected products. The index can be divided to provide useful data on what is happening in different industries, such as building or production, as well as representing the overall frame of industry position in a particular country.

There is a variation in the way in which a wholesale price index can be determined. One variation has to do with the type of products that are included in the evaluation. Most nations will include products related to five basic commodity groups: agriculture, import and export activity, mining, production and hunting.

The number of products or commodities from each of these five groups may also differ and affect the result of the calculation. Meno nations will analyze current prices for more than two thousand products that trade corporations with other corporations. In the most basic method, the price of ka is addedŽDý product to determine the total amount of price for the period under consideration. This number is then diameter in some way and the end result compared to past periods. If the index is higher than the previous period, it is a sign that the economy passes through a certain amount of inflation.

Another common method is known as a ten -day price index. In this model, products that show a relatively high level of fluctuation in a given month are selected and rated every ten days. It is assumed that prices for all other products will remain more or less static. Only data for products with higher fluctuations inside the month are specifically checked for changes before the average.