Disinflation

Disinflation means inflation is still positive but slowing down. In simple terms, prices are still rising, but they are rising at a slower rate. Disinflation is important because it can show that inflation pressure is easing without the economy necessarily falling into deflation. Central banks often look for disinflation when they try to bring inflation under control. For example, if inflation falls from 7% to 5% to 3%, that is disinflation. Disinflation is not the same as deflation. Disinflation means prices are rising more slowly, while deflation means the overall price level is falling.