Inflation and the Consumer Price Index

- The inflation rate is the percentage of change in average prices of consumer goods relative to the same period of the previous year (sometimes denoted as ‘YoY'). It is a measure of the cost of living and of stability in consumer purchasing power. An acceptable rate of inflation would not exceed increases in incomes, so there should then be increases in real net incomes and purchasing power.
- In July 2012, Headline Inflation rose for the third consecutive month to 2.73 percent YoY, thus driving up inflation during 7M12 to 2.92 percent YoY.
- KResearch projects that after remaining low during 2Q12, inflation may gradually rise in the second half of the year (2H12). Throughout 2012, KResearch expects Headline Inflation and Core Inflation to average between 3.2-3.7 percent and 2.2-2.5 percent, respectively.