Posted in Finance, Accounting and Economics Terms, Total Reads: 238
Definition: Base Period
Base period is the time period generally used for collecting as much data and information in order to compare them against the economic data of other periods. Base period is the time which is used for comparison purposes for a date in the future for forecasting or past data to understand trends, dynamics etc.
The base period is used as a benchmark against the current prices or against prices of a particular year.
For example, when it comes to economic policies that are taken irrespective whether they are fiscal or monetary policy, a base period or a year in which a decision was taken is considered and then the current scenario is compared with that year’s circumstances.