Although no one really likes inflation (where you see the value of your dollar declining), deflation is a worse headache to overcome.
Deflation is a general decline in prices, according to Investopedia. It means prices of the things we buy become cheaper. It’s different from having a sale, whose purpose is usually to get rid of old or out-of-fashion stock, so that shops have more space to bring in new stock.
If Singapore goes into a period of prolonged deflation (like Japan where penny-pinching, risk aversion and death of ambition has plagued the youth), what does it mean for us?
1. I can buy more stuff in Singapore, but I have less spending power overseas
Your favourite Tokyo Banana will be even more ridiculously expensive.
2. Soon, my cost of imported food will get more expensive
Your lunches and dinners will too.
3. My festive dinner and entertainment costs will go up because my imported food prices increase
But we still need to celebrate right? Otherwise sure lose face.
4. I freak out and start to hoard my money. Less hongbaos for everyone!
Just don’t write name can already.
5. Sales decrease because people start to spend less