- Refers to the rate of change in the CPI.
- Refers to the change in value of all goods in the basket.
- Headline inflation is more relevant for developing economies than developed economies.
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- Measures the change in average consumer prices after excluding from the CPI certain items with volatile price movements.
- Excludes food and fuel items from headline inflation.
- Since the prices of fuel and food items tend to fluctuate and create ‘noise’ in inflation computation, core inflation is less volatile than headline inflation.
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