Difference Between Wholesale Price Index WPI and Consumer Price Index CPI
Wholesale Price Index (WPI) and Consumer Price Index (CPI) are two indices without which market won’t survive. These two indices decide and set the prices of goods in market. These tools also keep the track of changing prices.
In some countries, WPI is a tool to adjudge deflation rate in the market. The traded commodities, good and services manufactured by different groups and corporation are WPI’s core. Namely five basic human commodity groups manufacturing, agriculture, quarrying, mining, and in the export/import industry are used to establish the status of WPI. Simply put, WPI is the middle price of all the prices asked by the manufacturers for all the merchants to let them pay a definite amount.
Consumer Price Index or CPI, on the other hand also denotes the middle price but which is paid by end consumers, homeowners and private sectors to purchase a particular service or commodity. Education, apparel, foods and beverages, communication, transportation, recreation, housing, and medical care are the 8 groups for which the CPI is set. Some services like school and government registration fees and electricity and water bills are also included sometimes. Sometimes, it is also referred to as standard retail price (SRP).
These two indices WPI and CPI are important to determine the strength of a country’s economy. WPI is used for deflation whereas inflation is marked by CPI. If you are purchasing something in bulk, the rate should be lesser than CPI or SRP.