The base effect is the distortion in a monthly inflation figure that results from abnormally high or low levels of inflation in the year-ago month.

The inflation rate is calculated as the percentage change in prices compared to the previous year. If prices were unusually low or high in the previous year, it can significantly impact the calculated inflation rate, even if current price changes are moderate. This is known as the "base effect".

For example, if prices increased by 5% in the current year, but fell by 10% in the previous year, the base effect would result in a very high calculated inflation rate, even though the current year's price increase was modest.