Choose the time period (e.g., monthly, quarterly, yearly) and the location/item index (e.g., CPI for a country).
Get the inflation index value for the current period and the previous period:
Current period index value = ( I_{t} )
Previous period index value = ( I_{t-1} )
Use the inflation rate formula:
( text{Inflation Rate} = left( frac{I_{t} – I_{t-1}}{I_{t-1}} right) times 100 % )
If using year-over-year inflation:
( text{Inflation Rate}_{YoY} = left( frac{I_{t} – I_{t-12}}{I_{t-12}} right) times 100 % )
If using period-to-period (e.g., month-over-month):
( text{Inflation Rate}_{MoM} = left( frac{I_{t} – I_{t-1}}{I_{t-1}} right) times 100 % )
For a basket-based approach (if you have prices instead of an index):
( text{Inflation Rate} = left( frac{text{Avg Price}_{t} – text{Avg Price}_{t-1}}{text{Avg Price}_{t-1}} right) times 100 % )
Round the result to the desired decimal places (e.g., one or two).