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The Developing World's Hidden Inflation Risks

A combination of specific inflationary shocks and vulnerabilities could seriously threaten developing economies' stability and prosperity. Although part of the policy response to these risks is in the hands of poorer countries themselves, the international community can and must help.

ABIDJAN/PARIS – As the global economy begins to emerge from the COVID-19 crisis, managing inflation risks will be much more challenging in developing countries than in advanced economies. That reflects the nature of the shocks driving inflation and the fact that lower-income countries are ill-equipped to respond to them decisively. A combination of specific shocks and vulnerabilities could thus seriously threaten these countries’ economic stability and prosperity.

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