Reference Base Period

Posted in Finance, Accounting and Economics Terms, Total Reads: 512

Definition: Reference Base Period

Reference Base Period is a year in which the CPI (Consumer Price Index) was at 100. This is a benchmark and economist judge future inflation level by comparing with it. At present between year 1982 and 1984 reference base period is set.

A price level is assigned to a year from CPI and then by comparing with the reference base period one can interpret the inflation level in that particular year.

For example, suppose year 2013 is assigned a CPI level of 125. So, it can be inferred that the prices in 2013 has inflated by (125%-100%) 25% compared to the base period of 1982-1985.


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