Disinflation is a decrease in the rate of inflation – a slowdown in the relative rate of increase of the general price level of goods and services in a nation's gross domestic product over time. It is the opposite of reflation.
If the inflation rate is not very high to start with, disinflation can lead to deflation – decreases in the general price level of goods and services. For example if the annual inflation rate one month is 5% and it is 4% the following month, prices disinflated by 1% but are still increasing at a 4% annual rate. If the current rate is 1% and it is -2% the following month, prices disinflated by 3% and are decreasing at a 2% annual rate.
See also Hyperinflation Stagflation Devaluation Chronic inflation Deflation
References
Further reading
External links Globalization and Global Disinflation by Kenneth Rogoff, at IMF.com What is Disinflation by Timothy McMahon, at InflationData.com http://www.voxeu.org/index.php?q=node/3025 investopedia.com - Disinflation http://economia.unipv.it/pagp/pagine_personali/gascari/disiflation_msvsirr_may_2011.pdf