Why is Deflation Deemed worse than Inflation?

Deflation is considered worse than inflation because it alters consumer behaviour. Spending declines as consumers anticipate lower prices, driving down demand and prices. There is also the debt burden as prices fall, this exacerbates the value of debt, making it harder for borrowers to repay their loans leading to higher default or bankruptcy rates. Businesses are also less likely to invest in new projects or expansions due to declining revenue and negative market sentiment. Unemployment rates get higher as a result of deflationary spiralling and the central bank’s ability to manage and combat deflation is much more limited.