Inflation negatively impacts an economy by decreasing GDP and economic growth, reducing national and individual savings, and distorting the price mechanism which leads to inefficient allocation of resources. Inflation also decreases profits and investment as it hurts consumers with fixed incomes and production costs rise.

1. In overall, inflation will effect GDP, saving, income, resources, profits and investments. The inflation
will decrease the gross domestic product and economic growth in the country will slowdown.
Besides, reduces national saving and individual saving is the another effect of inflation. Moreover,
consumers on fixed income will lose out. Inflation will distort of price mechanism because inefficient
allocation of resources. Furthermore, inflation decreases profit andinvestment because of the
production.