Too early to predict global recession, India may not be impacted much: Economists, ET BFSI

New Delhi [India], March 11 (ANI): There’s rising concern that the worldwide economy could also be heading towards a slowdown, with some specialists even warning about the potential of a recession.

The principle cause behind this concern is the latest developments in america concerning increased tariffs on imports.

Specialists consider that if these tariffs are carried out in April as deliberate, they may have a major impression on international commerce, provide chains, and financial development.

Madan Sabnavis, Chief Economist at Bank of Baroda advised that the upper tariffs within the U.S. have the potential to have an effect on inflation and will decelerate the easing insurance policies of central banks worldwide.

He identified that whereas all central banks are at present specializing in selling development by decreasing rates of interest, a rise in tariffs might disrupt this course of. He additionally highlighted that international locations which are extremely depending on exports will face critical challenges, as their financial development may very well be impacted.

He mentioned, “Nations extra depending on exports will face challenges right here as their development will probably be affected. India being a home oriented economic system will probably be buffered to a big extent on the expansion entrance although will probably be impacted by sharp forex volatility”.

Ajay Bagga, a banking and international market skilled advised ANI that the impression of U.S. tariffs may very well be extreme sufficient to push main components of the world right into a recession.

He defined that in at this time’s interconnected world, manufacturing is unfold throughout a number of international locations. For instance, uncooked supplies could also be sourced from one nation, processed in one other, after which assembled in numerous areas. Any disruption on this international provide chain might decelerate financial exercise and even trigger unfavourable development in some areas.

He mentioned ,”Might show to be disruptive to the extent of tipping some areas right into a degrowth and recession. The Atlanta Fed GDP Now quantity for the US itself for Q1 2025 is exhibiting a unfavourable print of – 2.4 per cent. That is the impression widespread tariff disruption might have.”

As per specialists, India, being a largely domestic-driven economic system, is predicted to be considerably shielded from the direct results of those international commerce disruptions.

In keeping with Madan Sabnavis, India’s development will probably be buffered to a big extent as a result of its economic system doesn’t rely as closely on exports as another international locations.

Nonetheless, he warns that India should still expertise sharp forex volatility because of international market uncertainty. Which means the Indian rupee might fluctuate considerably, which might create challenges for companies that depend on worldwide commerce.

Whereas as per the specialists’ view, it’s too early to say with certainty whether or not the world will enter a recession, the dangers are rising. The U.S. tariff coverage has created uncertainty in international commerce, and if the proposed tariffs are carried out, they may decelerate economies worldwide.

India is probably not hit as exhausting as export-driven economies, however it would nonetheless must navigate forex fluctuations and total international financial uncertainty. (ANI)