disinflation

IPA/ˌdɪs.ɪnˈfleɪ.ʃən/
KK[dˌɪsɪnflˈeʃən]IPA/ˌdɪs.ɪnˈfleɪ.ʃən/

disinflation — noun

1. a situation in which the general rise in prices across an economy continues but

1.nounC1
Definition

a situation in which the general rise in prices across an economy continues but at a decreasing rate, so that prices are still going up but more slowly than before

Example

The central bank's decision to raise interest rates led to a period of disinflation that lasted nearly two years.

noun phrase: a period of disinflation

Many consumers noticed the effects of disinflation when fuel prices stopped rising as fast as they had the year before.

common object: effects of disinflation

Common collocations
  • a period of disinflation
  • the effects of disinflation
  • experience disinflation
  • disinflation process
Synonyms
  • deceleration

    a more general term for slowing; disinflation is the specific economic term for slowing price growth

  • cooling

    informal term used in financial journalism; 'the economy is cooling' can describe disinflation among other things

Antonyms
  • inflation

    the general rise in prices; disinflation is a reduction in the rate of that rise, not the opposite of inflation

  • reflation

    a deliberate policy to increase the price level or counter deflation

Usage Note

Frequently used in discussions of monetary policy and central-bank decisions. Unlike deflation, which describes a drop in overall prices, disinflation still leaves prices higher than before — just rising at a slower pace.

Common Mistakes

The government is worried about disinflation because prices are falling.
The government is worried about deflation because prices are falling.
disinflation means slower price increases; deflation means actual price drops.

Word family

  • disinflationary
    adjectiveC2
  • inflation
    nounB2
  • inflationary
    adjectiveC1
  • deflation
    nounC1
  • deflationary
    adjectiveC2

Synonym discussion

Sense: noun/1

All four terms describe changes in the general price level, but they refer to different directions and magnitudes. Inflation means prices are rising overall. Disinflation means prices are still rising, but at a slower rate than before — the economy is cooling but not contracting. Deflation means prices are actually falling, which often signals weak demand and can harm economic growth. Price stability is the ideal state where inflation is low and predictable (often around 2%). For example, an economy moving from 5% to 3% annual inflation is experiencing disinflation, not deflation — prices are still 3% higher than last year.

disinflation ↗deflation ↗inflation ↗price stability

Common collocations

Phrases

  • a period of disinflation
  • the process of disinflation
  • disinflation policy

Etymology

LatinFrenchEnglish

Formed by adding the prefix de- (meaning 'down from' or 'reverse of') to the word 'inflation'. The economic sense developed in the mid-20th century to describe a slowing of inflation, distinct from the more severe 'deflation' which had been in use since the 1800s.

First known use

1880

1880, in the meaning defined above