What is the import and export price index?
The import export or trade of goods between two countries is very important for the country’s economy and it also improves relationship with foreign partners.
The import export data shows that that many economists and some policy makers as well use the many different indicators that help to know them about the economy of the country
The example of these indicators is Import Price Index (IPI) and Export Price Index (EPI).
If you are someone who is curious to know about what impor export prie index is then this post is for you .
In this blog post we will look at some things that will tell you how they work and why they are important for trade
Import Price Index (IPI)
The Import Price Index or IPI is an example of one of the few economic indicator that allows you to know and measures the changes that keeps on coming in the prices of goods and services a country imports from other nations.
It is usually expressed as a percentage The import price index also gives you valuable insights into many aspects of a country’s economy:
1.Inflation Monitoring: According to the global import export data when there is an increase in the import price index it means that the prices are rising for
This thing can increase the overall inflation in the domestic economy as businesses may pass on higher import costs to consumers.
- Exchange Rate Effects: As shown by the studies the changes in exchange rates of currency can affect the import price index
This majorly happens when a country’s is weaker in comparison to their partners the you may have to high import prices.
It is because it takes more of the domestic currency to purchase the same amount of foreign goods.
- Supply and Demand: The Changes in the supply and demand for imported products can also change the IPI.
Like for example the change in the supply chain helped in increasing the demand for some goods or some events that can affect import prices.
Export Price Index (EPI)
The Export Price Index is similar to the import price index .It allows you to measures the changes in the prices of goods and services that a country exports to other country.
It is also denoted in percentage . Some important things that it shows for your business are following
- Competitiveness: An increase in the EPI tell us that the country’s exports are becoming more expensive for foreign buyers.
This can have a negative impact as no one will buy it and the demand will be lessfor the country’s products in international markets also whil affecting its competitiveness.
- Export Revenues: On the other hand as shown by the import export data an increase in the EPI can tell us that the prices which can give you higher export revenues if demand remains strong.
Conclusion
The Import Price Index (IPI) and Export Price Index (EPI) are very important tools for understanding the difficult things of trade.
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