Global inflation has a significant impact on the economies of developing countries. With rising prices of goods and services around the world, these countries often feel the effects more quickly and more deeply than developed countries. One of the most striking impacts is the increase in the cost of living. The increase in prices of basic commodities, energy and imported goods forces consumers to spend more money on basic needs, which causes a decrease in people’s purchasing power. The impact of global inflation also affects domestic inflation. Developing countries that depend on imports of raw materials will be directly affected by the surge in global prices. This can create an inflationary spiral, where the prices of local goods also rise in response to rising import costs. In addition, global price volatility causes uncertainty in the market, which can reduce foreign and domestic investment. The economic sectors most affected are agriculture and manufacturing. Many developing countries are major producers of agricultural commodities, but they also depend heavily on input costs that are influenced by international prices. This increase in costs makes their products less competitive in the global market. In the manufacturing sector, spikes in raw material prices can lead to production cuts, layoffs and reduced exports. In addition, rising inflation affects the government’s ability to manage fiscal policy. To tackle inflation, many governments have been forced to increase interest rates, leading to higher borrowing costs. This can burden small and medium-sized businesses, which usually depend on loans for operations and expansion. The social impact of inflation is also worth noting. Price increases often cause dissatisfaction among the people, which can lead to protests or political instability. Communities that are already on the verge of poverty are increasingly made worse by this condition, creating greater social inequality. In facing global inflation, developing countries need to formulate adaptive economic policies. Product and market diversification is important to reduce the risks associated with dependence on certain commodities. In addition, development of local infrastructure and technology can increase competitiveness. Some developing countries try to protect consumers by implementing subsidies on basic products. However, these measures often put further pressure on state budgets. Prudent monetary policy is also needed to control domestic inflation without hampering economic growth. The economic resilience of a developing country in the face of global inflation depends greatly on the policies they implement and their economic structure. Commitment to investment in education and human capital development is also critical to building long-term resilience.
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