January 2026

Global inflation has a significant impact on the economies of developing countries. One of the most striking aspects is the increase in prices of goods and services. These countries often depend on imports to meet basic needs, and as global inflation rises, the prices of imported goods also soar. As a result, people’s purchasing power decreases, thereby exacerbating poverty and inequality. In the production sector, inflation inhibits investment. Uncertainty regarding prices makes local and foreign investors reluctant to invest. This imbalance reduces the potential for economic growth in developing countries, which in turn slows down job creation. With high levels of unemployment, social stability could be threatened, worsening economic conditions. The impact of global inflation is also visible in terms of monetary policy. Central banks in developing countries tend to raise interest rates in anticipation of inflation, which can cause borrowing costs to increase. This has an impact on small and medium businesses, which have difficulty obtaining financing. If there is not adequate support, many businesses can go bankrupt. In addition, developing countries face challenges in terms of external debt. Rising global interest rates increase the burden of debt payments, most of which are denominated in foreign currencies. When the local currency weakens, the debt burden becomes heavier, triggering an economic crisis. Countries such as Argentina and Türkiye are already feeling this impact, making it difficult for them to meet their debt obligations and manage budget deficits. The agricultural sector is also inseparable from the impact of inflation. The increase in fertilizer and raw material prices causes production costs to increase. Many farmers were unable to adapt to these changes, resulting in a decline in food production. With rising food prices, inflation is creating a critical food security crisis in already vulnerable countries. The influence of global inflation on foreign investment also needs to be considered. Economic uncertainty reduces investors’ interest in investing in developing countries. They prefer to invest in assets that are considered more stable, such as developed markets. This has an impact on the development of infrastructure and technology in developing countries, which are highly dependent on foreign investment. Finally, the impact of global inflation has implications for fiscal policy. Governments in developing countries are forced to divert budgets for subsidies and social assistance to help people affected by inflation. In the long term, these decisions could undermine public investments, such as education and health, that are critically needed for sustainable economic growth. From all these factors, it is clear that global inflation has a complex and multidimensional impact on the economies of developing countries. Preparedness and effective mitigation strategies are critical to reducing risks and protecting economic growth.