Global inflation refers to the general increase in prices of goods and services that occurs in various countries simultaneously. The impact on economic growth is very significant, including positive and negative aspects. One of the main impacts of global inflation is an increase in the cost of living. When prices of daily necessities increase, people’s purchasing power decreases. Families who previously could afford various goods and services are now forced to save money. This causes a decrease in consumption, which is one of the driving forces of economic growth. Reduced demand can slow the growth rate of gross domestic product (GDP). On the other hand, global inflation also encourages companies to increase product prices. In this case, companies that have a strong market position may be able to maintain their profitability, even though consumers reduce the amount of purchases. However, in a long-term scenario, if uncontrolled inflation occurs, it could cause uncertainty that deters new investments. An increase in interest rates is another impact that often occurs due to global inflation. Central banks in various countries tend to raise interest rates to control inflation. While this aims to maintain economic stability, higher interest rates can slow loan growth. This has an impact on the real estate sector and small businesses, where access to capital becomes increasingly difficult. Inflation can also affect international trade. Countries experiencing high inflation may see their exports become less competitive; their goods become more expensive on the global market. This can reduce market share and cause economic stagnation. On the other hand, countries with lower inflation can benefit from the inflow of foreign investment, which seeks stability. From a labor market perspective, global inflation can cause uncertainty that has the potential to increase unemployment rates. When companies are faced with rising production costs, they may be forced to streamline their operations. On the counter side, inflation can trigger higher wages if workers demand compensation to match rising costs of living. The technology sector is usually the most positively affected when global inflation occurs. Technology companies can increase efficiency and innovation, allowing them to survive even in conditions of high inflation. Technological innovation can accelerate economic growth if it can support productivity in other sectors. In the long-term context, how a country overcomes the impact of global inflation is very determining. Effective monetary policy and supportive fiscal policy can help stabilize economic growth. Countries that are able to adapt quickly will likely be more successful in maintaining their competitiveness in fluctuating global markets. Overall, the impact of global inflation on economic growth is very complex and multidimensional, affecting various sectors in diverse ways. Navigating these challenges requires a strategic approach that prioritizes stability and sustainability.
