Skewflation
Topic: Inflation and Index Numbers: CPI, WPI, IIP and the Deflator · NCERT: Beyond NCERT
Meaning
Skewflation is a sharp price rise in a narrow group of items while overall inflation stays moderate. The price pressure is "skewed", or lopsided, towards a few goods, usually food items such as pulses or onions. Headline numbers may look calm, but households that spend a lot on those items still feel real pain.
Example
Onion or pulse prices can shoot up after a bad crop while CPI-C inflation stays moderate. Food carries about 46% of CPI-C (2012 series), so poor families, who spend most of their budget on food, feel this much more than the headline figure shows.
Don't confuse with
- Stagflation: high inflation, high unemployment and stagnant growth all happen at the same time, across the whole economy.
- Headline inflation: this is inflation in the full index (CPI-C in India), not in one narrow group.
Related concepts
- Inflation
- Inflation rate
- Base effect
- Food inflation
- Creeping inflation
- Galloping inflation
- Hyperinflation
- Disinflation
- Deflation
- Reflation