Global inflation has a significant impact on the economies of developing countries. One of the main effects is an increase in the prices of goods and services, which can worsen people’s living conditions. When inflation increases, people’s purchasing power decreases, especially for low-income groups who do not have adequate financial reserves. As a result, domestic consumption could be disrupted, hampering domestic economic growth. Apart from the direct impact, global inflation also affects import costs. Developing countries often depend on raw materials and capital goods from developed countries. When global inflation drives up commodity prices, domestic production costs also increase. This can cause companies to raise selling prices, exacerbating local inflation. Furthermore, global inflation can result in unstable capital flows. Investors tend to shift their investments to countries that offer higher returns, which is often the case in developed countries when inflation rises. This makes it difficult for developing countries to attract foreign investment, affecting infrastructure development and strategic economic projects. Monetary policy is also affected. Developing country central banks are often forced to raise interest rates to stabilize exchange rates and control inflation. However, this could result in higher borrowing costs, reducing access to credit for small businesses and microenterprises. Ultimately, this impact can hinder innovation and private sector growth. From an international trade perspective, global inflation can affect the competitiveness of developing country products. When production costs increase, export prices may also increase, suppressing competitiveness in the global market. As a result, developing countries that have export-based economies are at risk of experiencing a decline in export volume, resulting in a larger trade deficit. Education and health are also affected. As the cost of living rises, governments face pressure to balance budgets. Funding for education and health may be cut to cover subsidies needed to keep prices affordable for citizens, thereby reducing the quality of public services. Society is also vulnerable to social instability due to the impact of inflation. When inflation eats away at savings and purchasing power, the potential for social unrest increases. Dissatisfaction with the government which is deemed unable to overcome inflation can become a demand for political change. In a global context, the G20 and institutions such as the IMF have an important role in overcoming the impact of inflation on developing countries. International cooperation in dealing with inflation problems and providing financial support can help developing countries adapt to this situation. Development projects that focus on economic resilience and diversification of export products are also important to overcome the long-term impact of global inflation. Investments in technological innovation and increased productivity are also crucial. Encouraging higher education and skills among the workforce can help developing countries face the challenges caused by inflation. With the right strategy, developing countries can reduce the impact of global inflation and increase their economic resilience.
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