How Businesses Price Products When Inflation Goes Out of Control
Wartime inflation is different. It does not go up a few percent. It goes up 30, 50, 300 percent.
Most business owners learn about inflation in normal conditions. Prices go up a few percent. They raise their prices a little. Life goes on.
Wartime inflation is different. It does not go up a few percent. It goes up 30, 50, 300 percent. Currencies collapse overnight. The price of a bag of flour that cost you 5,000 units last month costs 12,000 this month. You cannot plan. You cannot lock in supplier costs. And your customers, who are also drowning, push back on every price increase you try to make.
Business pricing during inflation is one of the hardest skills to get right, and one of the most important. This is not a hypothetical. It is happening right now in Myanmar. like it happened in Syria throughout the 2010s. It happened in Ukraine after 2022, too. And businesses in all three of those countries have had to figure out, in real time, how to price products when the numbers stop making sense.
Here is what they did, and what you can learn from it.
First, Understand What War Does to Prices
Before you can price anything, you need to understand why everything gets more expensive during a conflict. There are three main forces at work.
The currency collapses. When war breaks out, investor confidence evaporates. Foreign money leaves the country. The local currency loses value fast. When your currency is worth less, everything you import costs more, and almost every business imports something, whether it is raw materials, fuel, packaging, or machinery parts.
The supply chain breaks. War destroys roads, ports, and warehouses. It displaces workers. It shuts down factories. When goods become scarce and hard to move, prices go up. Even if the currency holds, scarcity alone will drive inflation.
The government prints money. Governments at war spend far more than they collect in taxes. To fill the gap, many print money. More money chasing fewer goods means prices rise even faster.
In Myanmar, all three happened at once. After the military coup in February 2021 and the civil war that followed, the kyat lost roughly half its value against the US dollar. Inflation hit 28.6 percent in mid-2023, with prices rising 40 to 50 percent in the conflict zones in the north and east, according to the World Bank. The junta printed an estimated 20 trillion kyat since the coup, roughly $5.1 billion at black market rates, pouring fuel onto the fire.
In Syria, the trajectory was even worse. Before the civil war began in 2011, one US dollar bought you about 47 Syrian pounds. By mid-2023, one dollar bought 15,000 Syrian pounds. Pistachio sweets that were once affordable in Damascus were, by 2020, cheaper to buy in Germany than in Syria. The Syrian middle class, which had represented 60 percent of the population before the war, shrank to 10 to 15 percent.
In Ukraine, inflation peaked at 26.6 percent in October 2022, driven by destroyed production facilities, shattered supply chains, and the central bank printing 400 billion hryvnias to cover the war budget. Brent crude oil hit $100 a barrel in 2022, its highest since 2013, pushing up fuel costs across every industry.
These are the conditions businesses had to price inside. Here is how the smart ones handled it.
Strategy 1: Stop Pricing in Your Local Currency
The most common thing businesses do in high-inflation wartime economies is quietly switch to pricing in US dollars, even when the government tells them not to.
This happened openly in Syria. As the Syrian pound cratered from 47 to the dollar all the way to 15,000, businesses that continued pricing in pounds found their margins wiped out almost immediately. The pound could lose 10 to 20 percent of its value in a single month. A business that sold goods at a fixed pound price in January might be selling at a 40 percent loss by March simply because their import costs were settled in dollars.
The Syrian government tried to stop this. In 2020, the regime issued Decree No. 3, which banned the circulation of US dollars under penalty of imprisonment. The Criminal Security Department was arresting people for trading in foreign currency. It did not work. Businesses simply priced in dollars informally. The black market rate became the real rate.
When Syria’s government eventually fell in late 2024, one of the first economic acts of the new administration was to repeal Decree No. 3, legalizing dollar circulation. By then, dollarization had already happened organically. Businesses had already been doing it for years because survival demanded it.
The practical lesson on business pricing during inflation: when your local currency becomes unreliable, you need a stable anchor for your prices. The US dollar is the most common one. In conflict zones near China, some businesses anchor to the yuan. In border regions of Myanmar near Thailand, many transactions shifted to Thai baht. The specific currency matters less than the principle: price in something stable.
Strategy 2: Update Prices Much More Frequently Than Normal
In normal times, a business might update its price list once or twice a year. When it comes to business pricing during inflation, that habit is a guaranteed way to go bankrupt.
In Myanmar, businesses started updating prices weekly. Some updated daily. The reason is simple: if your costs change 15 percent in a month, and you only update prices quarterly, you are absorbing four months of cost increases before you can adjust. At 15 percent monthly inflation, four months means your margins have been crushed by more than half.
Ukrainian businesses faced a similar problem. Ukraine entered the full-scale war with 10 percent annual inflation. That jumped to 26.6 percent by October 2022. Businesses that had locked in prices in supply contracts signed before February 2022 were forced to renegotiate those contracts, often under pressure, or absorb losses that made continuing the business impossible.
The businesses that survived treated their price lists as living documents. They tied their prices to their actual input costs. When flour went up, bread went up the next day, not the next quarter. This was not popular with customers. But it was the only way to keep the lights on.
Strategy 3: Build the Dollar Exchange Rate Into Your Costs Every Day
In Myanmar, the official exchange rate for the kyat was fixed by the junta at 2,100 kyat to the dollar. The black market rate, the rate at which anyone could actually buy dollars, was over 4,500 to the dollar in May 2024. More than double.
This dual exchange rate created a specific trap for businesses. If they priced based on the official rate, they would be pricing as if their inputs cost half what they actually cost, because their real import costs were at black market rates. Businesses that fell into this trap ran out of money fast.
The solution was to calculate all costs at the real market rate, not the official rate, and price accordingly. This was politically risky. The junta had surveillance systems watching prices and could accuse businesses of speculation or market manipulation. But the alternative was to price at a rate that guaranteed losses.
In Syria, the same trap existed. The official pound rate was kept artificially high while the street rate reflected the real value. The businesses that priced at the official rate were effectively subsidizing their customers out of their own capital. They did not last long. The ones that survived found ways to incorporate the real exchange rate, often through informal communication with loyal customers about why prices had changed.
Strategy 4: Shrink the Product Before You Raise the Price
This is called shrinkflation, and it is not unique to war. But in wartime, it becomes a critical survival tool.
Rather than raising the price of a product from $5 to $7, you keep it at $5 and make it slightly smaller. A 500-gram bag of coffee becomes 400 grams. A bottle of cooking oil goes from a liter to 750 milliliters. A restaurant reduces portion sizes without changing the menu price.
Customers notice a price increase immediately. They notice a smaller portion more slowly, especially if the packaging design stays similar. In environments where consumers are already stressed about money and where every price increase triggers political backlash or a loss of customers, shrinkflation gives businesses a way to maintain margin without the immediate confrontation of a visible price hike.
Syrian food businesses used this extensively during the worst years of the conflict. It was not dishonest in their context. It was the difference between staying open and closing.
Strategy 5: Price Oil-Dependent Products Separately
Oil affects everything. Transportation costs. Heating and cooling. Manufacturing. Packaging production. When oil prices spike because of a war, every product in your catalog is affected, but not equally.
After Russia invaded Ukraine in 2022, Brent crude went to $100 a barrel. In June 2022, the US producer price index for gasoline had jumped 85 percent compared to a year earlier. Diesel was up 109 percent. European natural gas prices were double what they were in 2021.
Businesses that had bundled fuel costs into a single product price had no mechanism to explain or adjust when fuel costs doubled. Their product prices seemed arbitrary. Businesses that tracked fuel as a separate visible cost element, whether formally in contracts or informally with regular customers, had a way to explain price changes in a logical way. A customer who understands that your delivery surcharge went up because diesel doubled is far more accepting than a customer who simply sees the total price go up 30 percent with no explanation.
In conflict zones, this is even more critical because fuel availability is unpredictable. In some areas of Myanmar, fuel shortages meant that getting supplies into a town doubled the cost of transport. Businesses that had built flexible delivery pricing could absorb that change without losing customers. Businesses with fixed all-in pricing had no room to maneuver.
Strategy 6: Give Your Best Customers Price Stability, Even If It Costs You Short-Term
This sounds counterintuitive in an environment where your own costs are rising fast. But businesses that maintained stable prices for their most loyal and important customers during the worst inflation periods often came out the other side with those customer relationships intact, while competitors who raised prices aggressively lost accounts permanently.
The logic is this: in a conflict economy, trust is scarce. Customers who feel that a supplier is taking advantage of the crisis to extract maximum value will find alternatives, even at inconvenience. Customers who feel that a supplier is trying to protect them as much as the situation allows will stay and will often pay more later when the pressure eases.
Ukrainian manufacturers who held pricing for key clients through 2022, even when it meant absorbing some costs short-term, reported that those clients became long-term international partners. The relationship forged under extreme conditions proved more durable than any contract.
This does not mean pricing yourself out of business to protect customers. It means being transparent, communicating honestly about cost pressures, and making genuine efforts to absorb what you can while being clear about what you cannot.
Strategy 7: Stop Buying in Bulk When the Currency Is Collapsing
Normally, buying in bulk is smart. You get a discount. You reduce supply risk. But in a collapsing currency environment, bulk purchasing means you are spending a large amount of a currency that will be worth significantly less by the time you have used what you bought.
In Myanmar, businesses in 2022 and 2023 that bought large inventory reserves in kyat were watching the real value of that inventory decline as the currency fell. Their stock was worth less in dollar terms every week, even if the kyat price they sold it for looked the same or even higher.
The smarter approach in a collapsing currency: buy smaller amounts more frequently, converting to real goods quickly before the currency loses more value. Hold less cash. Turn it into inventory faster. This approach accepts higher per-unit costs in exchange for avoiding currency exposure.
The Syrian business owner who kept 10 million Syrian pounds in a bank account in 2011 and spent them slowly over the next few years watched them go from being worth roughly $212,000 to being worth less than $3,000. The business owner who converted that cash into goods or hard assets immediately fared far better.
The Hardest Part: Communicating Price Increases to Customers
Knowing how to price is one problem. Getting customers to accept price increases without abandoning you is a different one.
In every wartime economy studied, the businesses that kept customer relationships intact during extreme inflation shared one practice: they explained what was happening, plainly, before raising prices. They did not just send a new price list. They talked to their customers, told them what their input costs had done, showed them where the pressure was coming from, and in many cases gave customers a window of time at the old price before the new price took effect.
This is not a complicated strategy. It is just respectful communication. But it makes a significant difference because it separates you from businesses that are seen as exploiting the crisis and positions you as a partner trying to navigate the same storm.
In Syria, businesses that communicated honestly with their customers maintained loyalty even as prices tripled. Businesses that raised prices without explanation lost customers to whoever was slightly cheaper, even in cases where the cheaper competitor was not actually more trustworthy
What All of This Comes Down To
Pricing in wartime is not really about pricing. It is about staying connected to reality faster than your competitors. Every business owner who has figured out business pricing during inflation, whether in Kyiv, Damascus, Yangon, Buenos Aires, or Istanbul, arrived at the same place: update costs daily, price at real market rates, communicate honestly, and make decisions in weeks not months.
The businesses that fail are the ones that treat wartime as a temporary disruption, keep their peacetime pricing processes, and hope that conditions will normalize before the numbers catch up with them. Sometimes conditions do normalize. But usually, by the time they do, those businesses have already run out of margin to survive the wait.
If You Live in a Stable Country, Why This Still Matters
You might read about Myanmar’s collapsing kyat or Syria’s pound crashing from 47 to 15,000 per dollar and think: that is a war economy. That has nothing to do with me.
You do not need a war for inflation to destroy a business. You need a government that prints too much money, loses control of its currency, or gets hit by an external shock. All three have happened in peaceful countries recently.
Argentina did not fight a war. In 2023, its annual inflation rate hit 211 percent. A basic food basket that cost 2,000 pesos in 2020 cost over 100,000 pesos by early 2024. Argentine restaurants printed menus on whiteboards because laminated menus were outdated before the ink dried. Businesses that had not learned to price in dollars, reduce inventory exposure, and shorten planning cycles got wiped out. The same moves that kept Syrian businesses alive in 2015 were keeping Argentine businesses alive in 2023.
Turkey was not at war. But between 2021 and 2022, its central bank cut interest rates while inflation was already rising, because President Erdogan believed lower rates reduce inflation. The Turkish lira lost nearly 60 percent of its value against the dollar. Inflation hit 85.5 percent in October 2022. Turkish restaurant owners were recalculating menu prices weekly. Importers had no idea what their next shipment would cost. Businesses that priced in dollars or kept lean inventory did far better than those waiting for the lira to stabilize.
The United States went through it in the 1970s. In October 1973, Arab members of OPEC cut off oil exports to the US over its support of Israel in the Yom Kippur War. Oil quadrupled from $3 to nearly $12 per barrel within months. By 1974, US annual inflation hit 12.3 percent, up from 3.4 percent two years earlier. Businesses that had locked in fixed-price supply contracts found those contracts impossible to honor. Trucking, manufacturing, and agriculture had to reprice almost everything. The ones that moved fast kept going. The ones that waited did not.
War or no war, the lesson is identical. Business pricing during inflation follows the same rules whether the cause is a coup, a currency crisis, or an oil embargo. Selling at last month’s prices while paying this month’s costs is a fast way to go broke. These strategies are not reserved for conflict zones. They apply anywhere the numbers stop holding still.
The Dangerous Myth: “Wait It Out”
When costs start rising, most business owners do not raise prices immediately. They wait. Maybe it is temporary or conditions settle. Maybe customers will leave if prices go up. So they absorb the cost and hold the line. It is the most common mistake in business pricing during inflation.
Three months of that thinking, at 10 percent monthly inflation, and you are selling below cost. You are not protecting your customers. You are spending your own capital to subsidize them, and your capital runs out long before inflation does.
In Argentina, the businesses that raised prices monthly, even when it caused friction, kept their margins and stayed open. The ones that held prices to protect customer relationships ran out of working capital before conditions turned. They stayed loyal to customers right up until the day they had to close.
In Turkey, restaurant owners who raised menu prices regularly were called out on social media for profiteering. Restaurant owners who kept prices steady to avoid the criticism ran at a loss for months. Most of them eventually shut. The ones getting called greedy online were the ones still open a year later.
Governments tend to make this worse, not better. Syria’s regime banned dollar pricing and arrested traders who used it. In Myanmar, the junta imposed an official exchange rate at less than half the real market rate and pressured businesses to follow it. Turkey’s government publicly pushed supermarkets to freeze prices, even calling increases a form of economic terrorism. Argentina imposed price controls on hundreds of basic goods. In every case, the outcome was the same: producers stopped making goods they could not sell at a profit, shelves went empty, and black-market prices rose far above any official level.
Price controls do not reduce the cost of making something. They just make making it unprofitable. That is not a political opinion. It is what happened, repeatedly, in every country that tried it.
Waiting is not caution. In an inflationary environment, waiting is just a slower way of losing.
Selected Sources
Myanmar inflation and currency data
- World Bank — Inflation and poverty in Myanmar:
- Radio Free Asia — Myanmar economy post-coup:
- The Diplomat — Myanmar bleak economic prospects:
- East Asia Forum — Poverty and conflict in Myanmar:
Syria currency collapse and inflation
- Middle East Institute — Rampant inflation in Syria:
- Middle East Institute — War of hunger:
- World Vision — Syria economic collapse:
- PBS News — Dollar vs Syrian pound:
- The Media Line — Dollarization of Syrian economy:
Ukraine and global oil prices
- Centre for Economic Strategy — Ukraine War Economy Tracker:
- World Bank — Food and energy price shocks from Ukraine war:
- Federal Reserve — Effect of Ukraine war on global inflation:
