Creeping inflation
Also called: Mild inflation · Topic: Inflation and Index Numbers: CPI, WPI, IIP and the Deflator · NCERT: Beyond NCERT
Meaning
Creeping inflation is a slow, steady rise in the general price level, below about 3% a year. Prices go up gently and predictably, so people and firms can plan. It is generally seen as benign, meaning harmless, and it often goes along with a growing economy.
Example
If a basket of goods costs ₹100 this year and prices rise by about 2% a year, the same basket costs roughly ₹102 next year. Wages and savings can easily keep up with this.
Don't confuse with
- Galloping inflation: prices rise at double- or triple-digit rates each year, and people start losing confidence in money.
- Disinflation: this means inflation is slowing down. It is not a label for a low, steady rate.
Related concepts
- Inflation
- Inflation rate
- Base effect
- Food inflation
- Galloping inflation
- Hyperinflation
- Disinflation
- Deflation
- Reflation
- Skewflation