Latin American countries experiencing deflation and why a price decline isn't always as positive as it seems

During a period of economic stagnation, with more business bankruptcies and a growing number of bad loans, companies reduced their prices in an attempt to revive consumption, but they were unsuccessful. This occurred in a very aging population more focused on saving than on consuming. What normally happens is that, during a process of deflation, people postpone consumption in the hope that prices will continue to fall, and this, in turn, further hinders economic recovery. A vicious cycle ensues in which the reduction in consumption worsens the fall in prices and the lack of investment. Without a doubt, they are on the opposite side of a recession. Historically, Latin America has gained prestige for its management of inflation. Historically, Latin America has gained prestige for its management of inflation. According to Benjamin Gedan, the "painful experiences" of the past motivated changes in numerous countries that ensure central bank autonomy and responsible monetary policy. And although achieving the ideal inflation rate for each economy is always a great challenge, economists agree that the lessons learned in previous decades have left a positive mark on the region. According to Benjamin Gedan, the "painful experiences" of the past motivated changes in numerous countries that ensure central bank autonomy and responsible monetary policy. And although achieving the ideal inflation rate for each economy is always a great challenge, economists agree that the lessons learned in previous decades have left a positive mark on the region. Economists affirm that, as a general rule, the optimal price target is usually between 2% and 4%. Although each country has its own inflation target (the level that is most suitable for the economy in question), neither very low nor very high inflation is good news. This is generally considered a "healthy" level of inflation. Despite all this, economists believe that what is happening in Panama, Costa Rica, and El Salvador is a temporary phenomenon, as their economies are growing even faster than other nations in the region.