What is the term for a slowdown in the rate of inflation?

A slowdown in the rate at which prices are rising is called disinflation.

During disinflation, inflation remains positive but becomes lower. For example, if annual inflation falls from 5% to 4%, prices are still increasing; they are simply rising more slowly. Disinflation therefore differs from deflation, in which the general price level actually declines.

Disinflation can happen when central banks raise interest rates, weakening demand and reducing pressure on prices. It can also follow falling energy or commodity costs, improved supply conditions, or slower wage and spending growth. The effects are not always painless: deliberate disinflation may bring slower output growth or higher unemployment.

The term is often confused with “reflation,” which describes policies or conditions intended to raise inflation after it has fallen too low. Hyperinflation is the opposite extreme: an exceptionally rapid loss of purchasing power. Disinflation is about the rate of price change, not necessarily a reversal of prices already paid.