Global Markets Intermediate

Deflation

💡 In plain English: When prices fall broadly — sounds good but often signals a weak economy where people delay spending.

Definition

A decrease in the general price level of goods and services. While it increases purchasing power, it often signals economic contraction.

📌 Real-World Example

Japan experienced deflation for 20+ years (1990s–2010s) — prices fell slightly each year, people delayed buying (why buy today when it's cheaper tomorrow?), causing stagnation.

Related Terms

Inflation
The rate at which prices rise over time — eroding the buying power...
Recession
When the economy shrinks for two consecutive quarters — companies...
Central Bank / Repo Rate
The interest rate at which the central bank lends to commercial...
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⚠️ Educational Content: All definitions and examples on this page are for educational and consultancy reference purposes only. They do not constitute financial, legal, or investment advice. Moneykar is not registered with SEBI, CBUAE, SCA, or any financial regulator. Consult a qualified professional before making financial decisions.

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