Disinflation

From Wikipedia, the free encyclopedia

Disinflation is a decrease in the rate of inflation.^[1] Being how much prices are increasing per unit of time, it can be expressed using the word disinflation: The slowing of the rate of inflation per unit of time.

For example, one month the annual rate of inflation was 4.4% and the next month the annual rate of inflation was 4.0%. In this case the price of goods and services is still increasing, however, it is increasing at a slower rate, 0.4% less in the second month than in the first month.

Disinflation is proof of success in the battle against inflation. However, the rate of inflation should not decrease until it's negative, which is deflation, which is an overall decrease in prices, since deflation is always regarded as a negative state of the economy no matter how high it is.