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Headline inflation and food inflation UPSC NOTE

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  Why in news The wedge between headline and food inflation has been widening and stalling the alignment of the former with the target Mone...

 Why in news

  • The wedge between headline and food inflation has been widening and stalling the alignment of the former with the target

  • Monetary Policy Committee (MPC) decided to maintain policy rates to keep inflation aligned with the 4% target, despite persistent high food inflation which is affecting overall inflation rates.

Headline Inflation

  • Headline Inflation is the measure of total inflation within an economy. 

  • It includes price rise in food, fuel and all other commodities.

  • The inflation rate expressed in Wholesale Price Index (WPI) usually denotes the headline inflation. 

  • Though Consumer Price Index (CPI) values are often higher, WPI values traditionally make headlines

Food Inflation

  • Food inflation refers to the increase in the prices of food items over time.

  • It is a concern because rising food prices can significantly impact household budgets and lead to higher living costs for consumers.

  • Several factors contribute to rising food prices, including climate-related issues that can impact crop yields : droughts, dry spells, heatwaves, erratic rains

  • Additionally, government policies such as export curbs on essential food items can affect prices.

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Learnerz IAS | Concept oriented UPSC Classes in Malayalam: Headline inflation and food inflation UPSC NOTE
Headline inflation and food inflation UPSC NOTE
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