Daijiworld Media Network - New Delhi

New Delhi, Mar 11: Concerns over a potential global economic slowdown are intensifying, with some experts cautioning that a recession could be on the horizon.

A key factor driving these concerns is the United States' decision to impose higher tariffs on imports, set to take effect in April. Analysts predict that these trade barriers could disrupt global supply chains, dampen economic growth, and contribute to inflationary pressures.

Madan Sabnavis, Chief Economist at Bank of Baroda, emphasized that the tariff hikes could hinder central banks' efforts to support economic growth. “At present, most central banks are focusing on growth by reducing interest rates. However, an increase in tariffs could disrupt this strategy,” .

Sabnavis also highlighted the disproportionate impact on export-driven economies, stating that countries heavily reliant on trade may face economic strain. “India, being largely a domestic-driven economy, will be somewhat shielded from the direct impact, though currency volatility remains a concern,” he added.

Ajay Bagga, a banking and global market expert, echoed similar concerns, warning that the repercussions of U.S. tariffs could be severe enough to push certain regions into economic decline. He noted that today’s interconnected supply chains—where raw materials, production, and assembly are spread across multiple nations—are particularly vulnerable to such disruptions.

“If these tariffs take full effect, they could be disruptive enough to push some regions into negative growth and even recession,” Bagga stated. Citing economic indicators, he pointed to the Atlanta Fed’s GDP Now projection, which currently estimates a -2.4% contraction for the U.S. in the first quarter of 2025.

Despite the global uncertainty, India’s economy is expected to be relatively insulated due to its strong domestic market. However, experts caution that currency fluctuations could create challenges for businesses engaged in international trade.

While it is too early to definitively predict a global recession, the risks are mounting. If the proposed U.S. tariffs materialize, they could stall economic momentum worldwide, leading to increased market uncertainty. For India, the primary challenge will be managing currency volatility amid shifting global economic conditions.