WPI vs CPI

Both wholesale price index (WPI) and the consumer price index (CPI) are the change in the price of various goods or services in the economy, where the wholesale price index measures the percentage change in the price in the wholesale index, while consumer price index measures the percentage change in the price in the retail market and hence it is more useful for consumers rather than a business person.

Inflation is a market situation in which the price of goods and services increases continuously over a period of time. Inflation is an important tool to control the flow of money in an economy and to measure inflation in an economy, WPI and CPI are used.

WPI is the wholesale prices index used to measure the average change in price in the sale of goods or services in bulk quantity by the wholesaler. CPI is the consumer prices index that measures the change in the price in the sale of goods or services in retail, or it measures the price of goods or services sold directly to consumers. Price index means an index number that refers to the degree to which the price of goods or services is increased with reference to the base year.

In this article, we look at the differences between WPI vs. CPI in detail –

WPI is a Wholesale price index used to measure the average change in price in the sale of goods in bulk quantity by the wholesaler. WPI also measures changes in commodity prices at the selected level before it reaches the final level, that is, the consumer. WPI is the first level where the first price increases in goods. It is published by the Economic Advisor in the Ministry of Commerce and Industry. It is restricted to goods covered under WPI, primarily fuel, power, and manufacturing products. It releases weekly for primary articles, fuel, and power. The base year for WPI is the financial year.

CPI is a consumer price index that measures the change in the price in the sale of goods or services in retail or the price of goods or services sold directly to consumers. CPI is the final level where the price increases of goods or services. It is published by the Central Statistic Office in the Ministry of Statistic and Programme Implementation. It is both for goods and services covered under CPI: education, food, transport, communication, recreation, apparel, housing, and medical care. It releases monthly. The base year for CPI is the calendar year.

Here we provide you with the top 11 differences between WPI vs CPI

The key differences between WPI vs. CPI are as follows –

• The full form of WPI is the Wholesale Price Index, and the full form of CPI is Consumer Price Index.
• WPI is used to measure the average change in price in the sale of goods in bulk quantity by the wholesaler, whereas CPI measures the change in the price in the sale of goods or services in retail or directly to a consumer.
• WPI is for only goods, whereas CPI is for goods and services.
• Inflation is measured in the first stage in WPI and the final stage in CPI.
• The price is paid by the manufacturer and wholesaler in WPI, and in CPI, it is paid by the consumer.
• Items covered in WPI are fuel, power, and manufacturing products, and in CPI, education, food, transport, communication, recreation, apparel, housing, and medical care are covered.
• WPI is used by very few countries, whereas 157 countries use CPI.
• The date of release for WPI is the weekly basis for primary articles, fuel, and power for the rest of items in publishing monthly, whereas, for CPI, it publishes monthly.
• WPI focuses on the prices of goods traded between business houses, whereas CPI focuses on goods purchased by consumers.

Let’s now look at the head to head difference between WPI vs CPI

Both WPI and CPI are used to calculate the inflation rate. WPI is used to measure the average change in price in the sale of goods in bulk quantity by the wholesaler, and CPI is used to measure the change in the price in the sale of goods or services in retail or directly to a consumer. Earlier on, WPI was only in use, but as the government could not know its impact on common people, CPI was introduced. WPI tells about inflation at the business level, and CPI tells about inflation at the consumer level.

Mainly WPI focus on prices of goods traded between business houses, whereas CPI focuses on prices of goods purchased by consumers. As CPI provides more clarity about inflation and its effect on the overall economy, it is widely used to calculate inflation compared to WPI. So, monetary policy primarily focuses on price stability, which can be achieved by controlling inflation which can be tracked and measured by WPI and CPI.

This has been a guide to the WPI vs CPI. Here we discuss the top differences between WPI and CPI, infographics, and a comparison table. You may also have a look at the following articles –

• Cost Push Inflation
• Inflation vs Deflation
• Inflation vs Interest Rate
• Differences Between Deflation and Disinflation