Global Inflation Threat Looms, Says India’s Central Bank Chief. India’s central bank chief, Reserve Bank of India (RBI) Governor Shaktikanta Das. Recently warned of a rising risk that global inflation could re-emerge. posing a major challenge to economies around the world. Speaking at a finance summit, Das emphasized that while inflation had shown signs of easing. The current economic landscape and uncertainties in energy and food supply chains suggest a potential return of inflationary pressures. This concern comes as the world grapples with ongoing disruptions in supply chains, volatile energy prices, and a series of economic policy shifts in key economies.
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Das pointed to several factors that could trigger inflationary pressures globally. First, the ongoing volatility in energy markets, particularly in oil and natural gas. Continues to push up the cost of goods and transportation. He noted that recent geopolitical developments. Particularly in regions critical to energy supply, have contributed to price swings and may continue to do so. Additionally, food inflation remains a critical issue due to unpredictable weather patterns. Which impact agricultural output. Das also highlighted the risk of “second-round effects” from recent inflationary trends. Where increased costs in one sector lead to price hikes in others, compounding overall inflation.
India’s central bank has already taken steps to control inflation domestically. Including periodic interest rate hikes and maintaining strict regulatory measures on credit flow. However, Das stressed that such measures alone may not be sufficient if global inflation rises due to factors beyond India’s control. The potential for central banks globally to raise interest rates could also create further strain on emerging economies like India. Which rely on maintaining stable interest rates to support domestic growth.
Das’s cautionary remarks come at a time when inflation remains a central concern for policymakers worldwide, especially with major economies like the U.S. and European Union adjusting their fiscal and monetary policies in response to inflationary threats. His comments also reflect the broader worries of emerging markets, which may face outsized impacts from any shifts in global inflation trends, given their vulnerabilities to exchange rate fluctuations and external price pressures.
In his closing remarks, Das called for coordinated international policy responses to tackle these emerging risks effectively. He suggested that multilateral cooperation on issues like energy security and food supply stabilization could help mitigate the risk of a global inflationary resurgence. Das’s statements underscore the importance of proactive strategies to navigate the uncertain economic future, both within India and across global markets.
