Is deflation worse than inflation?

Deflation, or a decrease in the overall price level of goods and services, can be seen as worse than inflation, or an increase in the overall price level, in some ways. Deflation can lead to decreased economic growth, as consumers may delay purchases in anticipation of prices falling further and businesses may cut costs by laying off workers. Additionally, deflation can make it more difficult for borrowers to repay loans, as the value of their wages and assets decreases relative to the amount they owe. Inflation, on the other hand, can lead to higher costs for consumers and can erode the purchasing power of money, but it can also stimulate economic growth by encouraging spending and investment.

The effects of inflation are often not directly felt but are played out over a long time, especially long-term investments are vulnerable to inflation.


At Horizon65, we created a mobile app that enabled you to check the effect of inflation on your savings.

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