How the ''inflation'' calculated in a country to their economic conditions ?

Question

How the ''inflation'' calculated in a country to their economic conditions ?

Answer 1

It depends on the "market basket" which is chosen. In the United States, the price of food, fuel and purchasing a home are excluded from the "core" inflation rate. That is why the price of food, fuel and buying a home can rise so rapidly without being reflected in the official "rate of inflation".

In China the price of food is included, so they started showing a sharp rise in inflation as soon as food prices started rising.

So, look to how the rate is calculated, or  price some staples the price of which is not subsidized. I know in India the price of fuel is subsidized by the government, and maybe wheat too. So that makes things appear different than they actually are. Somebody is paying the real price somewhere. In the case of imported oil, that has been a hefty bill, which is why upward adjustments are being made now.