What Is Inflation Rate? Inflation Definition Explained

Discover the inflation definition, key causes, economic impact, the RBI's role, and the difference between inflation and deflation.

Inflation is the rate at which the general level of prices for goods and services rises over time, reducing the purchasing power of a currency.

This explainer covers what causes inflation — demand-pull, cost-push and monetary factors — how it is measured through indices like CPI and WPI, and why economists watch it so closely.

It also looks at the Reserve Bank of India's role in keeping inflation within a target band, and the practical difference between inflation, deflation and disinflation.