This may be but the central banks claim they want to avoid deflation because it causes people to delay purchases, waiting to buy at a lower price later. This causes a slowdown in consumer spending and economic growth.

Deflation does not increase the value of debt unless the deflation is not anticipated. If deflation is 2% and the interest rate on the debt is 4% then the true burden of that debt is 6%. The rate of inflation or deflation is always a factor in determining interest rates. Interest rates are based on two factors, risk of default and the expected rate of inflation.

TEK