Inflation is not entirely related to negative things, the impact caused by the occurrence of inflation depends on the level of inflation. There are four levels of inflation in a country, mild inflation (less than 10% per year), moderate inflation (10% - 30% per year), heavy inflation (30% - 100% per year), and hyperinflation (more than 100 % per year).
When inflation is at a mild level it will have a positive effect on several parties or economic actors, including the country's economic rate. However, when the inflation rate is at its highest value, it will have a negative impact on the country's economy, resulting in a prolonged economic crisis.
For debtors
Debtor is a person who has a debt to an institution such as a bank. For a debtor, the occurrence of inflation will be beneficial, because the money that must be returned to the bank is lower in value than when it first borrowed. For example, before the onset of inflation, the debtor borrows Rp. 500,000 from the bank, when the inflation of Rp. 500,000 comes, the value will go down, which was initially valued a lot.
In times of inflation, the central bank, which is authorized to regulate interest rates, tends to raise interest rates, if interest in a bank rises, the value of money will tend to fall. An amount of money that was once expensive and a lot of value, when inflation will decrease in value.
For producers (entrepreneurs)
Inflation provides benefits for a producer who must continue to produce an output to be offered to consumers. When there is inflation, prices of goods and services in the market will rise because producers increase the selling price, so the company's income will be higher than before. Especially if the goods produced are the people's basic needs, they will continue to buy them even if the selling price rises.
Because the prices of goods and services on the market go up, producers will also try to increase the amount of production, even though an increase in the amount of production will create more production costs than before. This does not become a burden on producers, it will make producers have higher income compared to the increase in production costs, because the increase in production costs will be proportional to the number of sales and prices of goods sold.
For the peoples
Inflation, which in general has a significant negative impact on society, is also the wheel of the country's economy. It turns out that if faced and managed properly, inflation can have a positive impact on society. When producers start to increase the amount of production of goods, they will also certainly increase the number of workers, this can be an opportunity for people who need jobs. The community will get income, and can fix the financial crisis in the family. The creation of a number of job vacancies for workers will reduce unemployment and reduce poverty.
For the country
If inflation experienced by a country is at a low level, this can be indicated to have a positive impact on the country. Even though it is categorized as low inflation, if it is not properly controlled and managed, the expected positive effect will not be realized.
The positive impact of inflation felt by the State, is closely related to the positive impact of inflation felt by every economic actor, especially the public, when inflation can be handled properly will impact on a better economic wheel, by minimizing the money supply so that people are more interested in saving and invest, and can also increase national income.
The positive impact arising from the occurrence of inflation in a country can be felt and maximized by the presence of policies and the role of government. From low inflation to hyperinflation, a country must make policies to tackle inflation. Because if inflation is not handled effectively, only the negative impact will be received by the State and lead to an economic crisis.
