Disinflation

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Disinflation

A decrease in the rate of inflation.

Disinflation

A situation in which the inflation rate decreases, but does not reverse. For example, disinflation occurs when the inflation rate goes from 5% to 2%. Importantly, it is not deflation when the inflation rate becomes negative. Disinflation is considered a normal and healthy part of a business cycle.

disinflation

A slowdown in the rate of inflation. A drop in the inflation rate from 3% in one year to 2% in the next year is an example of disinflation. On an overall basis, disinflation is good for security prices, but it can be painful for individual companies that have made investment and borrowing decisions based upon a belief that a high rate of inflation would continue. See also inflation.

Disinflation.

Disinflation is a slowdown in the rate of price increases that historically occurs during a recession, when the supply of goods is greater than the demand for them.

Unlike deflation, however, when prices for goods actually drop, disinflation prices do not usually fall, but the rate of inflation becomes negligible.

disinflation

a fall in the general price level, frequently accompanied by a reduction in the level of national income (DEFLATION). A disinflation is often deliberately brought about by the authorities in order to combat INFLATION and to eliminate a BALANCE OF PAYMENTS deficit. Instruments of disinflationary policy include fiscal measures (e.g. tax increases), monetary measures (e.g. higher interest rates), and prices and income controls. See FISCAL POLICY, MONETARY POLICY, PRICES AND INCOME POLICY, INFLATIONARY GAP, INTERNAL-EXTERNAL BALANCE MODEL.
References in periodicals archive ?
Increases in private demand are the mechanism by which economies adjust to a disinflationary oil price shock.
Given the similar trends in both PCE and CPI core goods inflation, both in today's disinflationary period and in 2010, discrepancies between PCE- and CPI-based inflation measures are primarily explained by their services components.
These price developments were disappointing and suggested to many members that the disinflationary trend might have been arrested, at least for now, though the economic fundamentals remained consistent with a resumption of some further downward movement in the rate of inflation.
"While we continue to believe that there is some more scope for monetary easing, clarity on this will emerge only with incremental food inflation data, effect of monsoon on the disinflationary path of inflation, and degree of volatility from global factors," Oswal said.
A synchronised global downturn affecting Asia and the euro area in particular, and amplifying global disinflationary pressures; severe financial market stress with a reduction in global risk appetite, particularly in indebted economies, reductions in market liquidity, and some defaults of counterparties; and a slowdown in the UK driven by the downturn in its trading partners, fall in confidence, and correction in market risk appetite.
On Qatar's inflation, which according to the IIF is expected to remain low due to muted global price pressure and strong dollar, Maratheftis said a stronger Greenback is disinflationary and it's a "double whammy" for countries that are more diversified.
"Given that there have been no substantial new developments on the disinflationary process or on the fiscal outlook since January 15, it is appropriate for the Reserve Bank to await them and maintain the current interest stance," the central bank said in a statement.
The main factor behind the broad disinflationary trend across the region has been a drop in global food prices.
"The price measures show very strong disinflationary forces," said analysts at Nomura.
Meanwhile, the employment index declined further and disinflationary pressure intensified," HSBC economist Qu Hongbin said in a statement accompanying the data.
With today's disinflationary downdraft, wage growth can't gain any traction.