The impact of global inflation on the economies of developing countries is very significant and complex. First, global inflation is often triggered by spikes in energy, food and raw material prices. This has a direct impact on imports from developing countries that depend on foreign commodities. When the prices of these goods increase, the burden of production costs in the local sector also increases, which in turn can reduce the competitiveness of domestic industry. Furthermore, inflation affects people’s purchasing power. The increase in prices of goods and services results in a reduction in people’s ability to meet basic needs. In developing countries, where income levels are low, this impact is felt most profoundly. People’s daily lives are haunted by prices that continue to rise, while wages are often not directly proportional to the inflation that occurs. Monetary policy is also undergoing changes considering global inflation. Many central banks in developing countries have been forced to raise interest rates to control inflation. These policies, although perhaps effective in the short term, can restrain economic growth by increasing borrowing costs. The small and medium business sector, which is the backbone of the economy in many developing countries, is often hardest hit by such measures. The impact of global inflation also widens social disparities. Low-income people, who are the most vulnerable, are unable to adapt quickly to price changes, so they are pushed deeper into poverty. Meanwhile, the middle and upper classes may have more resources to withstand price volatility. As a result, economic injustice increases, creating social tensions. In addition, developing countries that depend on international loans also have to face the risk of changes in exchange rates. When global inflation occurs, the value of the local currency often experiences depreciation. This makes foreign debt more expensive and can trigger an economic crisis if not managed well. Foreign investment also tends to be affected by global inflation conditions. Economic uncertainty can make investors hesitate to invest in developing countries. As a result, investment flows can be hampered, distancing opportunities for job creation and vital infrastructure development. Looking from the export aspect, global inflation can have a positive impact on several developing countries which are able to increase the competitiveness of their products on the international market. However, if it is not balanced with strengthening domestic production structures, its effectiveness may be limited. Finally, to overcome the impact of global inflation, developing countries need to create adaptive and progressive economic policies. This includes investment in technology, human capital development, and economic diversification to increase resilience to global turmoil. These efforts are important so that developing countries can better face the challenge of inflation and build a more sustainable economy.
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