The Russia-Ukraine War will increase inflation around the world, including India, and slow down the economy. Former RBI Governor Raghuram Rajan has said that it will be difficult for countries to sustain their development. Prices of many commodities, including crude oil and wheat, have gone up. Inflation was already high in many parts of the world. Adding to the Russia-Ukraine war would only increase inflation and slow growth. Together, the two will have an impact on inflation, said Raghuram Rajan in an exclusive interview with CNBC-TV18.
The situation is similar in the US and Europe. The fight against inflation is likely to last a long time. This is not good news, said Raghuram Rajan. At the same time, Raghuram Rajan said that the sanctions imposed on Russia by the US and other countries would have serious consequences. Russia's invasion of Ukraine has brought Western nations together. Japan is with them. Western countries want to impose strict sanctions. These restrictions will definitely have an effect. Russia is a major exporter of many commodities, including energy. Sanctions on Russia will cut off their supplies. This is likely to have a negative impact on the global economy.
At the same time, this loss can be minimized by using other sources of supply. Negotiations are underway with Venezuela and Iran for crude oil. If the supply of crude starts from Iran, it will be good news. Second, it will be seen again in Shell Energy. Therefore, other sources of supply will have to be used as prices rise in the next few months. Rising prices will also reduce demand. Russia has a large hand in the supply of essential commodities. The world is currently heavily dependent on carbon energy, which needs to be reduced. Focus on renewable energy may increase again, said Raghuram Rajan.