I think it’s important to note that if you know there will be 1% deflation you will delay purchasing. If you aren’t sure prices will be lower tomorrow there is far less incentive to gamble on a lower price tomorrow, especially for things you need now or get better value acquiring now vs 1% savings.
In that context, a 1% deflationary rate that might drift around a little would be great. There are other consequences as well but just addressing your point.