My university teamed up with an American University, Embray-Riddle, to offer a joint masters. Embray-Riddle required a minimum average grade of 80%; my university came back to them and said no one in the last 10 years qualified for the masters. Eventually they lowered the requirements just so they could have students.
Later I did my masters in the Netherlands. The university made me do extra courses to compensate for my low grades. But I ended up doing reasonably well with an 8/10 average and was the top student in a few subjects.
Grade inflation sounds bad but I can positively say that grade deflation is worse. It badly demotivates students and robs them of years of their life as they repeat courses.