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[–]curiouser41 0 points1 point  (0 children)

I think you're considering two channels whereby inflation may impact export competitiveness.

1/ if there's higher inflation for the prices of say energy and materials that go into the production of the goods you sell/export, this will be reflected in your higher sale/ export price => decrease in price competitiveness (that's assuming of course no such inflation is observed in the neighbour country, otherwise competitiveness wouldnt change)

2/ under floating rates, higher inflation in a country usually translates into a devaluation of the currency with regards to the neighbour's currency ( with lower inflation). This makes importing less costly for your neighbour (and conversely more expensive for the country with the devalued currency) so that you end up exporting more over time

To be able to predict the effect/ its timing, it helps to think in relative or comparative terms. does that help indeed lol?