What are the Negative Impacts of Deflation on the Economy and Finance?

[Suba]

Deflation refers to a country's economic and financial condition where the prices of goods and services generally fall over a period of time. Deflation is the opposite of inflation. There are several characteristics of deflation such as falling prices of goods, falling demand, rising interest rates. reduced money circulation, etc. Deflation can be caused by several factors such as government monetary policy that is too tight, overproduction so that the supply of goods is widely available in the market, etc.

Mild, controlled and short-term deflation will greatly benefit the community, but severe and uncontrolled deflation will have a negative impact on a country's economy and finances.

 

[Augusta]

It is makes the price of things not to be too high for the people in like when it is thr inflation period

 

[Min George]

Deflation is not good either. There would be no motivation for businesses to produce and it would stall the economy.