CPI
refers to a weighted average of the price of a basket of essential goods and
services over a period of time in comparison to the same period in the past
(base period). The value of '220' means that prices of the goods/services in
the aforementioned basket are 120% higher than they were during the base period (1983). The purpose of calculating this metric is to highlight the effect of
inflation on the purchasing power of the people within that particular place.
Examples of goods and services that are often included in this basket are
food, housing transport and healthcare (based on the consumer habits of that
particular place.
