Inflationary Indices in Budgeting

Type: 
Best Practice
Approved by GFOA's Executive Board: 
June 2010
Recommendation: 

The Government Finance Officers Association (GFOA) encourages every government to consider using the inflation indices that work best as a predictor. This may mean the use of different indices depending on the expenditure category. The government should define the purpose for using an inflationary index and then select the appropriate index.