Inflation and its effects on global commerce have been recurring themes in IELTS Writing Task 2 prompts. Based on past exam trends and expert predictions, this topic is likely to appear frequently in future tests, particularly for candidates from emerging economies like India, China, and Vietnam. Let’s explore a recent question that aligns closely with real IELTS exams:

Some people think that inflation has a negative impact on international trade, while others believe it can have positive effects. Discuss both views and give your own opinion.

Analyzing the Question

This question requires candidates to:

1. Discuss negative impacts of inflation on international trade
2. Explore potential positive effects of inflation on global commerce
3. Provide a personal perspective on the overall impact

Let’s examine sample essays for different band scores, starting with a high-scoring response.

Band 8-9 Sample Essay

Inflation, the sustained increase in the general price level of goods and services, is a complex economic phenomenon that significantly influences international trade. While some argue that it predominantly harms cross-border commerce, others contend that it can yield positive outcomes. This essay will explore both perspectives before presenting my own viewpoint.

On the negative side, inflation can erode a country’s competitiveness in global markets. As domestic prices rise, exported goods become more expensive relative to those produced by nations with lower inflation rates. This price disadvantage can lead to reduced demand for exports, potentially shrinking a country’s trade surplus or exacerbating its trade deficit. Moreover, inflation often prompts central banks to raise interest rates, which can strengthen the domestic currency and further hamper export competitiveness.

Conversely, proponents argue that moderate inflation can stimulate economic growth and, by extension, international trade. A slight uptick in prices can encourage consumer spending and business investment, as individuals and companies seek to purchase goods before their value diminishes. This increased economic activity can boost production, potentially leading to greater export volumes. Additionally, if inflation outpaces wage growth, it may reduce labor costs in real terms, making a country’s exports more price-competitive on the global stage.

In my opinion, while inflation can have some short-term benefits for international trade, its long-term effects are predominantly negative. Persistent high inflation creates uncertainty, discourages foreign investment, and can lead to currency depreciation, all of which hinder sustainable growth in global commerce. Moderate and stable inflation, however, can foster a dynamic economic environment conducive to international trade.

In conclusion, the Impact Of Inflation On International Trade is nuanced and depends largely on its rate and duration. While short-term, controlled inflation may offer some advantages, maintaining price stability should be a priority for nations seeking to thrive in the global marketplace. Policymakers must strike a delicate balance, using monetary and fiscal tools to harness the potential benefits of inflation while mitigating its risks to international trade.

(Word count: 329)

Inflation's impact on international trade concept

Band 6-7 Sample Essay

Inflation is a big topic in economics, and it affects how countries trade with each other. Some people think it’s bad for international trade, but others say it can be good. I will talk about both sides and give my opinion.

First, inflation can make international trade harder. When prices go up in a country, the things they sell to other countries become more expensive. This means other countries might not want to buy as much, which is bad for the selling country. Also, when there’s a lot of inflation, it’s hard for businesses to plan because prices keep changing. This can make it difficult to make deals with other countries.

However, some people say inflation can help international trade in some ways. If inflation is not too high, it can make people want to buy things before prices go up more. This can make the economy grow, and when the economy is growing, countries might have more things to sell to other countries. Also, if a country’s money becomes worth less because of inflation, their products might seem cheaper to other countries, so they might sell more.

In my opinion, a little bit of inflation might be okay for international trade, but too much is definitely bad. When inflation is very high, it causes too many problems and makes it hard for countries to trade with each other. It’s important for countries to try to keep inflation at a low and steady level if they want to do well in international trade.

To sum up, inflation can affect international trade in both good and bad ways, but it depends on how much inflation there is. Countries need to be careful about inflation if they want to trade successfully with other countries. It’s a tricky balance, but it’s important for the global economy.

(Word count: 293)

Band 5-6 Sample Essay

Inflation is when prices go up in a country. Some people think it’s bad for trade between countries, but others think it can be good. I will talk about both ideas.

Bad things about inflation for trade:

• Things become more expensive to buy from other countries
• It’s hard to know what prices will be in the future
• People might not want to buy expensive things from other countries

Good things about inflation for trade:

• It can make people want to buy things quickly
• It can make a country’s products cheaper for other countries to buy
• It might help the economy grow

I think inflation is mostly bad for trade between countries. When prices go up too much, it makes it hard for countries to buy and sell things with each other. It’s better if prices don’t change too much.

In the end, inflation can be good or bad for trade. It depends on how much inflation there is. Countries should try to keep inflation low if they want to trade well with other countries.

(Word count: 159)

Explanation of Band Scores

Band 8-9 Essay:

• Demonstrates a sophisticated understanding of the topic
• Presents a well-balanced discussion of both viewpoints
• Uses advanced vocabulary and complex sentence structures
• Provides a clear personal opinion with supporting arguments
• Maintains excellent coherence and cohesion throughout

Band 6-7 Essay:

• Shows a good grasp of the main ideas
• Discusses both perspectives, though with less depth
• Uses a mix of simple and complex sentences
• Includes a personal opinion, but with less detailed support
• Has generally good coherence, with some minor lapses

Band 5-6 Essay:

• Addresses the basic requirements of the task
• Presents simple ideas on both sides of the argument
• Uses mostly simple sentences and vocabulary
• Offers a basic personal opinion
• Shows some attempt at organization, but lacks sophistication

IELTS Writing Task 2 essay structure

Key Vocabulary to Remember

1. Inflation (noun) – /ɪnˈfleɪʃən/ – A general increase in prices and fall in the purchasing value of money
2. Competitiveness (noun) – /kəmˈpetətɪvnəs/ – The ability and performance of a firm, sub-sector or country to sell and supply goods and services in a given market
3. Erode (verb) – /ɪˈroʊd/ – Gradually destroy or diminish
4. Exacerbate (verb) – /ɪɡˈzæsərbeɪt/ – Make (a problem, bad situation, or negative feeling) worse
5. Stimulate (verb) – /ˈstɪmjəleɪt/ – Encourage or arouse interest or enthusiasm in
6. Depreciation (noun) – /dɪˌpriːʃiˈeɪʃən/ – A reduction in the value of an asset over time
7. Nuanced (adjective) – /ˈnuːɑːnst/ – Characterized by subtle shades of meaning or expression
8. Mitigate (verb) – /ˈmɪtɪɡeɪt/ – Make less severe, serious, or painful

Inflation effects on global economy diagram

In conclusion, the impact of inflation on international trade is a complex and multifaceted topic that requires careful analysis. As you prepare for your IELTS exam, consider practicing with similar prompts that explore economic themes. For instance, you might encounter questions about how currency devaluation affects international investments or the impact of global economy on investments. To enhance your writing skills, try crafting your own essay on this topic and share it in the comments section below. This active practice will help you develop the critical thinking and writing abilities necessary for success in the IELTS Writing Task 2.