RBI flags global degrowth hit on trade, EMs | Business News,The Indian Express

Das said these developments pose a greater risk for emerging market economies (EMEs) as they will have to contend with both “domestic growth-inflation trade-offs and spillovers from the most synchronised tightening of monetary policy worldwide.”

Even as the Monetary Policy Committee maintained that the domestic economic activity is resilient and progressing broadly along its expected lines, with India expected to be among the fastest growing economies during 2022-23, the Reserve Bank of India (RBI) raised its concerns over impact of downward projections of global growth and rising risk of recession on global trade and emerging economies such as India.

“Disquietingly, globalisation of inflation is coinciding with deglobalisation of trade,” said RBI Governor Shaktikanta Das adding that the pandemic and war have ignited tendencies towards greater fragmentation, reshoring of supply chains and retrenchment of capital flows, which will pose long-term challenges for both globalisation and the global economy.

He said these developments pose a greater risk for emerging market economies (EMEs) as they will have to contend with both “domestic growth-inflation trade-offs and spillovers from the most synchronised tightening of monetary policy worldwide.”

While EMEs are facing tightening of external financial conditions, capital outflows, currency depreciations and reserve losses simultaneously, India too has witnessed portfolio outflows amounting to $13.3 billion during the current financial year and has seen its currency depreciate over 4 per cent this financial year.

While emerging market economies (EMEs) are facing tightening of external financial conditions, capital outflows, currency depreciations and reserve losses simultaneously, India too has witnessed portfolio outflows amounting to $13.3 billion during the current financial year and has seen its currency depreciate over 4% this fiscal.

https://indianexpress.com/article/business/rbi-flags-global-degrowth-hit-on-trade-ems-8073873/

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