Inflation and DeflationWatch
Im just looking an explanation for that question in few sentences to show me how it impacts :P
Deflation in the short term actually increases standard of living as goods become cheaper. But sustained deflation will mean that consumers delay their purchases as they expect prices to fall even more in the future. This delay in purchases mean less consumption and so economic growth falls. Firms may become more competitive as cost of production falls. Debt becomes more expensive for the govt.