Disinflation, in economic terms, is a drop in inflation caused by a decrease in the rate of inflation. When this phenomenon occurs, prices slow down and begin not to rise.
Disinflation should not be confused with deflation, which instead causes prices to fall below below zero. The causes of this phenomenon are attributed to the decrease in the money supply, to a contraction of the economic cycle or to a moment of recession.
The positive side is that with this process, domestic products are more competitive abroad, as prices fall. The exports of the country are therefore favored by this mechanism.
The negative effects on the other hand are visible on public debt, since inflation rates require high returns.
