The Inflationary Shock in Emerging and Developing Countries
The global inflationary shock affected developing countries in different ways. Its effects were compounded by monetary policy responses in developed countries. Above all, it represented a major shock, both in terms of increased poverty, particularly in the least developed countries, whose great vulnerability to international conditions it once again emphasizes, and in terms of risk assessment and the availability of external financing, as evidenced by the difficulties linked to foreign debt.
The inflationary shock of the early 2020s was global in both origin and expression. It stemmed from a complex interplay of supply and demand shocks, including disruptions in global supply chains due to the Covid-19 pandemic and subsequent lockdown measures, shifts in political dynamics leading to trade restrictions, challenges arising from the Russia-Ukraine conflict impacting the availability of key resources like hydrocarbons and food, and heightened tensions with the conflict between Israel and Hamas, which introduced further uncertainties.The aftermath of the inflationary shock of 2020-2023 manifests differently in each country, influenced by various factors. These include responses to the pandemic, the vulnerability of different countries to diverse price shocks (such as their reliance on hydrocarbons either as producers or…