1. Exporters Importers Savers Borrowers
IMPACT of DEFLATION
Exporters
Importers
Savers
Borrowers

2. Exporters: Positive Impact
Exports become price competitive in the international market – more affordable in overseas destinations therefore exports will increase - export receipts increase. New Zealand exporters’ revenue and profitability will increase due to decreasing cost of production in the domestic market

3. Importers: Negative Impact
Imported product is less price competitive than local products therefore price sensitive consumers will purchase local/domestic products in preference to overseas goods. Local goods will begin to make up a larger market share and there will be a decrease in demand for overseas product. As a result importers will find sales revenue declining.

4. Savers: Positive Impact
Deflation will mean that the value of money increases (purchasing power increases) rather than decreases as it does for inflation. Savers would be able to purchase more with their savings than when they initially put their money in the savings account

5. Borrowers: Negative impact
As the value of money (purchasing power) increases during a period of deflation the real value of debt is going to increase. When borrowers are going to pay off their loans, they will find the value of the goods they bought has become cheaper.