Definition, Meaning & Synonyms

deflation

Noun

/dɪˈfleɪʃən/

Definition

A decrease in the general price level of goods and services in an economy over a period of time.

Examples

After years of rapid growth, the economy faced significant deflation, causing prices to drop across various sectors.
The deflation of the housing market led to many homeowners owing more than their properties were worth.

Meaning

Deflation occurs when the inflation rate falls below 0% and leads to an increase in the real value of money. This can result in reduced consumer spending and can be detrimental to economic growth.