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The phrase "diminish by" is correct and can be used in written English
It means to reduce or decrease by a certain amount or degree. Example: The company's profits have diminished by 20% in the last quarter due to the economic downturn. In this sentence, "diminish by" is used to show the specific amount (20%) by which the profits have decreased. It could also be written as "decreased by 20%" or "reduced by 20%."
Exact(50)
Michigan cities have seen aid diminish by $4 billion.
The democratic deficit will grow, not diminish, by what happened on 23 June.
There life goes on, although the centuries require that some diminish by degrees, while others grow, like you.
She anticipated an uproar — "December-palooza," she called it to her staff — which she hoped would diminish by January.
Insofar as I regard these sequels as rat-bottom awful and can see them as nothing else, I lose out, diminish by one my count of blisses.
Runs scored per team in the National League did diminish by half a run per game after Aug. 10, almost exactly duplicating the Giants' decline and indicating that Giants hitters were neither helped nor hurt by the spy scheme.
Similar(9)
Mango strudel was diminished by unripe fruit.
We are all diminished by his death.
Their marketing power is diminished by ubiquity.
His size diminished by half.
And both are diminished by musicalisation.
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Since I tried Ludwig back in 2017, I have been constantly using it in both editing and translation. Ever since, I suggest it to my translators at ProSciEditing.

Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com