Global inflation has a significant impact on the economies of developing countries. In the era of globalization, economic changes in one country can quickly affect other countries, especially those that rely on exports and imports. The impact of inflation can be felt through several main channels, from increases in the cost of goods to changes in monetary policy. One of the first impacts of global inflation is an increase in the prices of goods and services. Developing countries, usually dependent on commodities, will face soaring raw material prices. This results in higher production costs, and manufacturers are forced to increase the prices of their products. Communities that are already economically vulnerable will feel a direct impact in the form of an increase in the cost of living that is disproportionate to the increase in income, thereby risking increasing poverty. In addition, global inflation affects currency exchange rates. Developing countries that have weak currencies often experience depreciation when inflation soars. When the exchange rate declines, the cost of importing materials and finished goods becomes more expensive, increasing inflationary pressures further. Currency depreciation also makes foreign currency debt more expensive to repay, affecting long-term economic stability. Monetary policy is an important tool in dealing with global inflation. Central banks in developing countries may be forced to raise interest rates to control inflation. However, this step could slow economic growth. Rising interest rates make borrowing more expensive, which impacts investment and household consumption. Therefore, the state is obliged to strike a balance between stabilizing prices and encouraging economic growth. On the other hand, global inflation can worsen social inequality. When prices of basic necessities rise, low-income groups will be more affected than high-income groups. This can create social dissatisfaction and political tensions, which in turn can disrupt economic stability. The impact of global inflation is also visible in the investment sector. Foreign investors tend to be more careful in conditions of uncertain inflation. Price volatility can influence investment decisions, making it difficult for developing countries to attract foreign capital. Without a steady flow of investment, long-term economic growth will be threatened, further increasing vulnerability to crises. Negative impacts are also felt in the agricultural sector. Global inflation often causes the costs of agricultural inputs, such as fertilizer and fuel, to increase. Price uncertainty makes farmers hesitant to invest in innovation or increase production, which risks reducing food security. This situation can exacerbate developing countries’ dependence on food imports, thereby increasing their vulnerability to global market fluctuations. The presence of global inflation also encourages developing countries to adapt to new trends, such as digitalization. Governments and the private sector in several countries are seeking to increase efficiency through technology. Investments in digital infrastructure can help the business sector adapt to market changes and increase competitiveness. In the midst of major challenges due to global inflation, better international cooperation is needed. Developing countries must collaborate to overcome the impact of inflation and build a more resilient economic system. With collective efforts, they can better weather the rapid fluctuations of the global economy. Understanding the impact of global inflation is important for formulating effective policies. Developing countries need to develop strategies to reduce the effects of inflation, as well as protect vulnerable communities and maintain long-term economic growth.
