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To uncover meaningful patterns and insights, we employed numerous EDA techniques. This included visualizations such as line graphs for time series analysis, bar charts for sector comparisons, and heatmaps to illustrate regional variations in inflation. By exploring trends over time, we equipped ourselves with a clearer understanding of how inflation rates have fluctuated across months and years.
For instance, our analysis highlighted notable spikes in inflation during particular months, aligning with global events, including the pandemic. By observing these trends visually, we could correlate them with economic events, enhancing our understanding of how external factors impact inflation.
Statistical Analysis
We also conducted statistical tests to discern significant trends. Calculating measures such as mean, median, and standard deviation for inflation rates helped us grasp the volatility and risk associated with the Consumer Price Index. Additionally, correlation analysis allowed us to examine the relationships between different sectors, yielding insights about how inflation in one category may influence others.
Q.What is the general CPI trend over the years?
·This graph shows the general trend of CPI over the years 2013 to 2023.
·The graph is highly linear due to the concept of calculating CPI in a unitory method using base year as 100 units(base year = 2012)
Q. What does the wide variation in inflation rates reveal about price stability and economic volatility in the Indian market during this period? (from -5.85% to 16.36%)
The inflation rates in India based on the dataset ranged from -6% to 17% with a standard deviation of about 3.9%, showing that prices varied widely across sectors and over time. This wide variation means the market experienced unstable prices and economic ups and downs, indicating significant price volatility rather than steady inflation during the period.
Q. Which items show deflationary trends, and what economic factors might be driving these negative inflation rates in the current market conditions?
Negative inflation means a decrease in prices compared to a previous period. It often occurs due to lower demand, excess supply, or increased production efficiency. While it benefits consumers by reducing costs, it may also indicate slowing economic activity or weak market conditions.
Q.Inflation rate trend from 2013 to 2025:
Inflation rate were high during the start of year 2014 then gradually decreased till 2019 then had a sudden spike in 2021 highly likely due to COVID-19 and now it is maintained between 3-4.
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