The impact of global inflation on the national economy is an increasingly important topic amidst world economic uncertainty. Global inflation refers to widespread increases in the prices of goods and services across countries, usually driven by factors such as rising energy costs, supply chain problems, and loose monetary policy. In this context, there are several ways in which global inflation affects the national economy. First, global inflation has a direct effect on the prices of imported goods. Countries with high dependence on imported goods will experience significant price increases. For example, if crude oil prices increase globally, domestic transportation and production costs will also increase, which in turn drives domestic inflation. This price increase can reduce people’s purchasing power, which has the potential to affect consumption and economic growth. Second, global inflation also has an impact on national monetary policy. The central bank may have to respond by raising interest rates to curb domestic inflation. Rising interest rates can slow economic growth because borrowing costs for businesses and consumers become higher. Entrepreneurs may delay new investments, and individuals tend to downsize, leading to a decline in overall economic activity. Third, uncertainty caused by global inflation can affect investor confidence. Rising inflation can create turbulence in financial markets, which can further affect foreign investment flows. Investors may feel reluctant to invest in countries that are considered less economically stable. A decline in foreign investment flows could hamper infrastructure development and industrial sector development. Fourth, global inflation can worsen social and economic disparities. More vulnerable groups in society, such as workers on fixed incomes, are easily affected by price increases. Meanwhile, those who own financial assets are more protected from economic changes. This inequality can generate social dissatisfaction, which ultimately has a negative impact on the political and economic stability of the country. Fifth, the export sector could also be affected. The increase in production costs due to global inflation can reduce the competitiveness of domestic products in international markets. If goods from other countries are cheaper, then consumers will choose imported products, which has the potential to reduce the country’s income from export taxes. Sixth, the long-term impact of global inflation can affect sustainable development. High inflation can reduce funding for social and environmental projects, which are important for achieving SDGs development targets. The country must be able to find a balance between controlling inflation and continuing to implement programs that support sustainable growth. By understanding the impact of global inflation, governments and policy makers must formulate effective strategies to mitigate these negative effects. Responsive fiscal policy, diversification of energy sources, and strengthening the domestic industrial sector are several steps that can be taken to overcome the impact of global inflation. Awareness of this issue will help the country face increasingly complex and dynamic global economic changes.
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