Global inflation refers to the general increase in prices of goods and services that occurs in many countries simultaneously. This phenomenon has a significant impact on the world economy. In this context, two key elements that need to be considered are the causes of global inflation and its impact on various aspects of the economy. One of the main causes of global inflation is a supply crisis caused by global supply chain disruptions. For example, the COVID-19 pandemic has disrupted the production and distribution of goods, especially in the consumer goods and energy sectors. This supply instability increases prices, affects people’s purchasing power and causes inflation in many countries. Rising inflation is also related to loose monetary policy. Central banks in various countries, in an effort to save the economy from recession, have lowered interest rates and launched massive stimulus programs. Although these measures are well-intentioned, they can encourage inflation, as more money circulates in the economy. The impact of global inflation is very broad and complex. First, inflation causes a decrease in people’s purchasing power. Rising prices of basic goods and services reduce the amount of goods that can be purchased with the same money, causing pressure on consumers, especially those on low incomes. Second, inflation affects investment. Economic uncertainty caused by inflation can make investors hesitate to invest, thereby reducing economic growth. Companies may delay large projects or expansions due to concerns about rising borrowing costs and market uncertainty. Apart from that, inflation also has an impact on government policy and fiscal settings. The government may have to raise taxes to cover increased costs, as well as reduce public spending, which could slow economic growth further. The country’s financial health is also affected. Countries with foreign currency debt experience greater pressure when domestic inflation rises, as debt servicing costs may become unaffordable. This could trigger the risk of default or debt crisis in developing countries. Inflation also affects currency exchange rates. When a country experiences higher inflation than others, its currency exchange rate can decline, affecting international trade. Rising prices of domestic goods and services can make exports less competitive in the global market. At the individual level, inflation can change consumption behavior. People may prefer to buy goods that are considered “safe” in terms of investment, such as property or gold, rather than other consumer goods. This can cause changes in demand in the market and make things difficult for businesses that depend on consumers. Global inflation has a profound and ongoing impact on the world economy. From declining consumer purchasing power to changing investment patterns, it is important for stakeholders at both national and international levels to understand and respond to these challenges. With proper analysis, the public and government can navigate the consequences of inflation to achieve sustainable growth in the future.