Mumbai: According to an article published in the Reserve Bank of India (RBI) bulletin, the tariff war launched by US President Donald Trump will adversely affect the global development and this will increase inflation.
On full scale tariff war is expected to increase inflation in the US by 1 to 1.20 percent and this year economic growth may decline by 0.60 percent.
Trade war and high tariffs are slowing down growth and increasing inflation. The article states that it affects not only the countries concerned but also on the global economy.
Whatever improvement in the US dollar had been completely expired from 17 March 2017 from November last year. Trade uncertainty in the US has affected the value of the dollar. Meanwhile, gold prices in the global market have reached a record height of over $ 3,000 due to tariff related concerns and demand for safe investment.
The Indian stock markets came under heavy pressure in February due to frequent selling of foreign investors and weakening of the rupee.
The article further states that India’s economy has also shown flexibility in the current global environment and recent fall in inflation will support economic reforms.
