The CPI is the abbreviated way of calling the Consumer Price Index, a meter of the price of products and services that the National Institute of Statistics (INE) of each country, discloses as an indicator of the evolution of the inflation. It is the most real value, since to measure it it is used in the cost of products and services commonly used by families compared to a previous period. The CPI is, therefore, the measure of the cost of living in a given country, and the data published in the CPI is taken as a value for such important economic issues as home debt, business debt, or to estimate salary increases and pensions and inflation depending on the rise in CPI. The rise in the CPI would ultimately reflect a loss of the purchasing power of buyers, as it indicates that with the same money, you can now buy fewer things.
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To calculate the CPI, the INE is in charge, through its officials, to carry out studies and polls to companies in each sector, with the objective of knowing the price of certain products and services, which are those that the INE considers that families consume on a regular basis. The products of the study to reflect the CPI are weighted, and their value for the CPI is calculated in based on a percentile, the real value is not taken, since not all products are equally necessary for the
The CPI for a certain period is calculated based on its variation with the previous period, and can be neutral, positive or negative. Once the data is available, the media are responsible for disseminating it to make it known to the consumer. The annual value of the CPI is calculated from all the CPI measurements taken during a year, this indicator is compared with the previous year, and it is the one that will determine the increase in salaries, pensions and the value of the debt of the country.
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