Item 7 - Evolution of the international trading system and its trends from a development perspective: Key issues arising from the international trading system and the impact on inclusive development. Photo Credit: Wikimedia Commons @UNCTAD
Inflation also affects international trade, an important aspect of dominant economies. Countries with higher inflation rates often see their currency value decrease relative to other countries, making their exports more expensive and imports cheaper. This can lead to a trade deficit, negatively impacting an economy. For example, in the 1970s, the U.K. experienced high inflation which led to a devaluation of the pound and a subsequent trade deficit.
