A country’s overall debt to its creditors is known as its government debt 

When inflation occurs, the value of money decreases, meaning that the amount of debt owed by the government decreases in real terms 

This implies that the government may repay its debt in an inflationary environment with less valued currency than it borrowed, lowering the loan’s actual worth 

However, the impact of inflation on government debt is not entirely positive 

If inflation is high and uncontrolled, it can lead to an increase in interest rates, which can cause the cost of borrowing to rise 

When the cost of borrowing increases, it becomes more expensive for the government to service its debt 

This can lead to a situation where the government may have to borrow more money just to pay the interest on its existing debt, leading to an increase in the overall debt burden 

Furthermore, inflation can also impact government deficits. A government deficit occurs when government spending exceeds its revenue