The impact of global inflation on the economies of developing countries is very significant and complex. High inflation in developed countries often results from loose monetary policies and spikes in goods prices, which then affect developing countries. One direct impact is the increase in prices of imported goods, including raw materials and consumer goods, which are crucial for local industry. Developing countries often depend on imports to meet people’s basic needs. When global inflation occurs, the prices of these goods soar, hampering people’s purchasing power. For example, the prices of energy and food, which are basic necessities for society, can rise drastically, resulting in social and political instability. Apart from the impact of inflation on prices, the currency exchange rates of developing countries are also affected. When developed countries face inflation, they tend to raise interest rates to curb inflationary growth, which can cause capital flows back to developed countries. As a result, developing countries can experience currency depreciation, further exacerbating domestic inflation. Small and medium-sized industries in developing countries are often the most affected. They have limited access to resources and financial support, making it difficult to adapt to changing costs. Many of them are forced to increase product prices, which can reduce sales volumes and hurt profits. In addition, global inflation can affect foreign investment. Economic uncertainty resulting from inflation can make investors hesitant to invest. If foreign investment flows decrease, economic growth will be affected, causing loss of job opportunities and increased unemployment. Education and health are also often affected by global inflation. Budget allocations for these sectors can be cut when the government has to overcome the impact of inflation. This can affect the quality of education and public health services, exacerbating existing social inequalities. Another element that needs to be considered is government politics. Government responses to inflation, such as subsidy policies or price interventions, can have long-lasting consequences. These policies often lead to budget problems, where the government has to balance helping the people and maintaining economic stability. In the long-term context, global inflation can affect the overall economic growth of developing countries. Infrastructure renewal, technological innovation and development of production capacity can be hampered by policies that rely on controlling inflation. Therefore, a healthy synergy pattern between developed and developing countries is very necessary to create a harmonious economic climate. By comprehensively evaluating the impact of global inflation, proactive mitigation measures can be formulated. This is important so that developing countries are able to adapt, minimize negative impacts, and take advantage of existing opportunities to increase their economic resilience amidst global uncertainty.
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