Some of negative implication of inflation in an economy are;
- Reduced profits Because increase in price will lead to reduced sales volume.
- Wastage of time because individuals may waste time shopping for reasonable prices/firms may waste time adjusting their price lists.
- Conflicts between employers and employees that lead to strikes because employees will demand high pay but the employers will be reluctant.
- Decline in standard of living because consumers purchasing power decreases.
- Loss to creditors because they receive payment for credit transaction when money has lost value.
- Retardation of economic growth due to reduced savings and investment.
- Loss of confidence in the monetary system as a medium of exchange and store of value.
- Adverse effects in balance of payment because exports become expensive relative to imports.