Is low inflation bad?

Low inflation can be both good and bad, depending on the context. In general, moderate inflation is considered healthy for the economy, as it can encourage spending and investment. However, if inflation falls too low or turns negative (deflation), it can lead to a variety of problems, such as decreased consumer spending, reduced economic growth, and increased debt burdens. Additionally, persistently low inflation can make it difficult for central banks to lower interest rates and stimulate the economy during times of recession. So, while low inflation may not be inherently “bad,” it can have negative consequences if it persists over an extended period.

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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