Economic Definition - Headline inflation

Headline inflation reflects the rate of change in prices of all goods and services in an economy over a period of time.

In India, headline inflation is measured through the Wholesale Price Index (WPI) – which consists of 676 commodities. We do not include services in the WPI in India. It is measured on year-on-year basis i.e., rate of change in price level in a given month vis a vis corresponding month of last year. This is also known as point to point inflation.

In India, there are three main components in WPI:

1. Primary Articles (weight: 20.12%)
2. Fuel & Power (weight: 14.91%)
3. Manufactured Products (weight: 64.97).