Disinflation

Disinflation

A slowing of the rate at which prices increase. Typically, this occurs during a recession as sales drop and retailers are not able to pass on higher prices to customers.

Investopedia Commentary

Disinflation is not to be confused with deflation, where prices actually drop.

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See also: Deflation, Hyperinflation, Inflation, Inflationary Psychology, Reflation, Stagflation, Stagnation

disinflation

A slowdown in the rate of inflation. A drop in the inflation rate from 3% in one year to 2% in the next year is an example of disinflation. On an overall basis, disinflation is good for security prices, but it can be painful for individual companies that have made investment and borrowing decisions based upon a belief that a high rate of inflation would continue. See also inflation.