disinflation
Disinflation is when prices are still rising but at a slower pace than before, so inflation is cooling without turning into a fall in prices.
In plain English
Think of your favourite bag of rice at the market. Last year it went from ₦45,000 to ₦60,000, a painful jump. This year it moved from ₦60,000 to ₦65,000. Still more money out of your pocket, yes, but the climb has slowed down. That slowing down is disinflation.
It is easy to confuse this with deflation, but they are cousins, not twins. Deflation means prices are actually falling, like that same bag of rice dropping from ₦65,000 back to ₦58,000. Disinflation just means the rate of increase is easing off. Prices are still going up, just not as fast as they used to.
In Nigeria, you hear this whenever the National Bureau of Statistics releases the monthly inflation figures and headline inflation drops from, say, 34% to 31%. People sometimes cheer as if prices have come down, but that is not quite it. Your bread, fuel, and transport fares are still costing more than last month, only the pace of the increase has softened a little.
In the United Kingdom, this played out clearly after 2022, when inflation soared past 11% and the Bank of England raised interest rates repeatedly. By 2024, inflation had eased toward 2%, a textbook case of disinflation achieved through tighter monetary policy.
For someone in London sending money home, disinflation in Nigeria matters because it can mean the ₦ your family receives loses value a little less quickly each month, even if things are still not cheap. It is progress, just slow and often unnoticed progress.
Suppose Nigeria's inflation rate falls from 33% in January to 29% in June. Prices of goods are still rising each month, but by smaller amounts than before. That gentle easing is disinflation at work.
Questions people ask
Is disinflation the same as prices coming down?
No. Prices are still rising during disinflation, just more slowly than before. Prices actually falling is called deflation, and that is a different and rarer situation.
What causes disinflation in a country like Nigeria?
It often follows the central bank raising interest rates to slow borrowing and spending, or a fall in the cost of imported goods, or better harvests that ease food price pressure.
Is disinflation good news for ordinary people?
It is a mild relief rather than a celebration. Your salary still buys less than it did a year ago, but the erosion is happening at a gentler pace, which gives household budgets a bit more breathing room.
Last reviewed