Key points
Deflation describes a fall in prices, which can increase the purchasing power of your money. This can result in more affordable goods and services and allow for more savings.

While it is often considered a good thing, persistent deflation can negatively affect the economy. If not managed well, deflation can increase unemployment and slow economic growth.
What is deflation?
Deflation describes a decrease in the price of goods and services in an economy. In practice, it is usually seen as a positive thing, as it can increase the purchasing power of your money. But in some cases, it can also have negative effects on the economy.