What does disinflation mean?
Disinflation refers to a slowdown in the rate at which the general price level rises — that is, inflation itself is decreasing even though prices continue to climb. It is a term central to economics and financial commentary, and it is easily confused with its near neighbour 'deflation', which means prices are actually falling. During disinflation, a basket of goods that cost 8% more last year might cost only 3% more this year: consumers still face higher prices, but the pace of increase has eased. The word carries broadly positive connotations, since moderating inflation typically signals successful monetary policy, though prolonged or sharp disinflation can accompany economic weakness. Economists, policymakers, and journalists use it constantly when discussing central bank decisions, interest rates, and the cost of living, making it essential vocabulary for anyone following economic news.
nounA reduction in the rate of inflation, meaning prices continue to rise but more slowly than before. It is distinct from deflation, in which prices actually fall.
- A decrease in the rate at which the general level of prices is rising (a slowing of inflation), as opposed to an actual fall in prices (deflation).
"The central bank's tight monetary policy brought about a steady disinflation without triggering a recession."
"Economists welcomed the disinflation, noting that consumer prices were still rising but at a much gentler pace than the previous year."
"The 1980s saw a sustained period of disinflation across much of the developed world as central banks tightened interest rates."
Rarely pluralized; the word is almost always used as an uncountable mass noun referring to the general phenomenon.
"Historians of monetary policy have compared the great disinflations of the early 1980s and the 1990s."
In disinflation your money still loses value every year — it just loses it a little more slowly than before.
Reviewed by Deb Chak, Editor. AI-assisted content curated by RJS Tech Solutions LLP.
Etymology of disinflation
Disinflation was formed within English by combining the prefix 'dis-' (indicating reversal or removal) with 'inflation', which derives from Latin 'inflare' ('to blow into'), from 'in-' plus 'flare' ('to blow'). The term emerged in twentieth-century economic discourse as economists needed a precise way to describe falling inflation rates distinct from outright deflation. It shares its root with related words such as 'inflate', 'inflationary', and ultimately English words like 'flatus' and 'flatulent', all tracing back to the same Latin verb.
How disinflation is actually used
Primarily a term of economics and financial journalism; register is formal to neutral. Because it sounds similar to 'deflation', writers often gloss it explicitly to avoid confusion. The adjective form is 'disinflationary'.
Easily confused with disinflation
Disinflation means the rate of price increases is slowing, whereas deflation means prices are actually falling.