What Are WPI and CPI? How Are Inflation Indices Calculated?

We live in a period where prices change rapidly every day. From your grocery shopping to your bills, from your rent payments to public transportation, every penny out of your pocket is actually a reflection of inflation. So how do we measure these changes? This is where WPI and CPI come into play. In this blog post, we explain what WPI and CPI are, in which situations they are used, how they are calculated, the fundamental differences between them, and where to access the latest data.

What are WPI and CPI?

WPI (Wholesale Price Index) is an index that measures price movements at the production and wholesale stages. It covers a wide range of products, from raw materials to semi-finished goods, from wholesale-sold goods to production inputs. Therefore, WPI reflects producers’ costs and price changes at the wholesale level of the market. In Türkiye, the term WPI is no longer officially used; instead, PPI (Producer Price Index) or Domestic PPI is used. Since increases or decreases in producer prices generally pass through to consumer prices after a certain period, WPI/PPI is considered a leading indicator of inflation.

CPI (Consumer Price Index) measures the change in prices of goods and services directly consumed by households. Items with the highest spending in daily life, such as food, transportation, housing, health, and education, are included in CPI. CPI is the most important inflation indicator in terms of showing consumers’ purchasing power and changes in the cost of living. Wage increases, rent hikes, and price updates in various contracts are often made according to CPI rates. In this respect, CPI reveals the inflation that directly hits people’s pockets.

What are WPI and CPI used for?

What is WPI / PPI (Producer Price Index) used for?

WPI / PPI (Producer Price Index) is an important indicator used to monitor production costs and wholesale price changes in sectors such as industry, agriculture, and energy. For businesses, it serves as a reference to gauge the level of cost pressures when setting pricing strategies. Governments and economists use this index to analyze the origins of inflation and to estimate the extent to which price increases at the production stage may pass through to consumer prices. In addition, historical WPI or PPI values can be used in cost difference or price difference calculations in long-term contracts, tenders, and agreements such as leases. If you want to better understand the importance of this process for businesses, you can take a look at our article What Is a Capacity Report?

What is CPI (Consumer Price Index) used for?

CPI (Consumer Price Index) is the key indicator that reveals the change in households’ cost of living and measures the movement of the prices consumers pay for goods and services over time. It is used by central banks and economic administrations to understand the general course of inflation and to assess the impact of monetary policies, especially interest rates. CPI rates are also taken as a reference in income adjustments such as wage increases, civil servant salaries, and social benefits,s; because when consumer prices rise, people’s purchasing power declines, which in turn necessitates adjustments in wages. In addition, CPI is used in many regulations that directly affect daily life, such as determining rent increase rates in lease agreements.

How are WPI and CPI calculated?

When calculating CPI (Consumer Price Index), a basket of goods and services representing households’ consumption habits is first created. This basket includes many items such as food, transportation, housing, health, and education. Each product or service is weighted according to its share in total consumer expenditures; in other words, items that occupy a larger place in consumers’ budgets have a greater impact on the index. TÜİK collects price data from different regions every month and calculates the index value by comparing these prices with the base period. Monthly and annual inflation rates are determined based on the resulting index. If you want to learn in more depth what these data mean for businesses, you can take a look at our article What Is Inflation Accounting?

WPI (Wholesale Price Index), or in today’s terms, PPI (Producer Price Index), measures price movements at the producer level. Here, a basket consisting of raw materials, semi-finished goods, and goods subject to wholesale is taken into account. Each input is weighted according to its share in production costs, and producer prices are collected regularly. These prices are then compared with the base period to calculate the index value. In this way, the change in production costs is measured and its pass-through to consumer prices is anticipated.

What are the fundamental differences between WPI and CPI?

The most fundamental difference between WPI (toda,y PPI / Domestic Producer Price Index) and CPI (Consumer Price Index) lies in the areas they cover and the types of prices they measure. PPI takes into account costs at the production stage and wholesale prices; in sectors such as industrial production, agriculture, and energy, raw materials, semi-finished goods, manufactured products, and inputs such as electricity, y–, and as–waters are part of the index. These prices are measured excluding taxes and reflect the cash sales value of products that producers sell domestically. CPI, on the other hand, covers the final goods and services that households consume in daily life. Items such as food, housing, transportation, health, education, and entertainment are the main components of the basket, and the final price paid by the consumer is taken as the basis; that is, indirect taxes such as VAT and SCT, and additional costs are included.

They also diverge in terms of areas of use. PPI is a critical indicator for anticipating cost pressures and price increases in the production process; it is important for businesses’ cost management, profitability calculations, and pricing policies. CPI, on the other hand, directly measures the cost of living and purchasing power, and is therefore the main reference index in wage increases, rent hikes, social benefits, and monetary policy decisions. For this reason, central banks’ inflation targeting and governments’ economic planning primarily look at CPI.

Where can the latest WPI–CPI data be found?

If you want to follow the latest CPI and PPI data in Türkiye, the most reliable source is the Turkish Statistical Institute (TÜİK). In TÜİK’s “Inflation and Price” category, CPI, D-PPI (Domestic Producer Price Index), and other producer price indices are published monthly. For example, according to the latest data, the annual change in CPI is 32.95%, and the monthly change is 2.04%.

You can also access PPI / D-PPI from TÜİK’s data portal; for example, the August 2025 D-PPI shows an annual change of 25.16% and a monthly change of 2.48%.

Monthly and annual comparisons

CPI and PPI data are published both as “compared to the previous month” (monthly change) and “compared to the same month of the previous year” (annual change). Both types of changes are clearly stated in TÜİK’s datasets.

• Monthly comparison: The percentage change between today’s CPI or PPI value and the value of the previous month. For example, in August 2025, CPI increased by +2.04% month-on-month.

• Annual comparison: The change compared to the value of the same month last year. For example, in August 2025, CPI increased by +32.95% year-on-year.

 

Sources: 1, 2.  

 

This blog post contains general information, not legal, financial, or investment advice. The content is prepared for informational purposes only, and you are advised to seek professional advice for your specific circumstances. The expressions in this article do not carry any binding nature or responsibility and reflect only the author’s evaluation. All your decisions are your responsibility, and Papel Electronic Money and Payment Services Inc. accepts no liability for any consequences arising from them.