Reading economic data

Paper 2 is full of tables and graphs of inflation, unemployment and trade. Read them carefully: the most common mistake is confusing a fall in the inflation rate with a fall in prices.

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Price index and inflation

A price index such as the CPI compares the price of a basket of goods with a base year (index = 100).
Inflation rate = (index this year − index last year) ÷ index last year × 100.
Fictional data.
YearCPI (2022 = 100)Inflation rate
2022100.0-
2023106.06.0%
2024109.23.0%
2025111.42.0%

Falling inflation is not falling prices

In the table the inflation rate falls from 6.0% to 2.0%, but the CPI keeps rising. Prices are still going up, just more slowly.
Prices only fall when inflation is negative: that is deflation.
Also check the units: a change from 3% to 4% is a rise of 1 percentage point, but the rate itself is about 33% higher.

Trade and unemployment data

Current account balance = exports − imports (of goods and services).
The current account moved from a surplus of $5.0 billion to a deficit of $2.5 billion.
$ billion20242025
Exports52.048.5
Imports47.051.0
Balance+5.0-2.5

Describing a trend

Use figures and say what they mean: 'Unemployment rose from 4.2% to 5.6% between 2023 and 2025, a rise of 1.4 percentage points, which suggests the economy was slowing.'
Look at the title, units and time period, quote the start and end values, and mention any change in direction.
Worked example

A price index rises from 120 to 126. Calculate the inflation rate.

  1. Change = 126 − 120 = 6
  2. 6 ÷ 120 × 100 = 5%

Answer: 5%

Key idea

Inflation rate = change in price index ÷ last year's index × 100. A lower but positive inflation rate means prices are still rising. Current account balance = exports − imports. Quote figures with units and say what they show.

Key words
Inflation
A sustained rise in the general price level.
Unemployment
People of working age who are without a job, are available to start work and are actively seeking work.
Current account
The part of the balance of payments recording trade in goods and services.
Current account balance
value of exports of goods and services − value of imports of goods and services
Deflation
A sustained fall in the general price level.

All International GCSE Economics key terms and definitions →

Quick check

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Extra practice

2 more questions

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  1. The CPI rises from 160 to 164. What is the inflation rate?

    Show the answer

    Answer: 2.5 %

    (164 − 160) ÷ 160 × 100 = 2.5%.

  2. The inflation rate falls from 4% to 1%. What is happening to prices?

    1. They are still rising, but more slowly
    2. They are falling
    3. They are unchanged
    4. They are rising faster
    Show the answer

    Answer: They are still rising, but more slowly

    Positive inflation means prices are rising.

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Sources and references

Checked by the GCSE-ready editorial team, 17 October 2026. Last updated 2 October 2026. Spotted a mistake? Tell us and we will fix it.

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