Global economic recovery will plunge if US-China trade war soar: Raghuram Rajan

The former RBI chief said that there are very worrisome scenarios, and we should not take this as lightly.

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Kochi: The global economic recovery could be hit if the trade war between the US and China escalate, renowned economist and former Reserve Bank of India (RBI) Governor Raghuram Rajan said on Friday.

"There are very worrisome scenarios here. I think we should not take this lightly," he said here.

"I do hope that better sense sort of prevails and we move off from a full-fledged process of one country doing it and the other country reacting and so on," he said.

Raghuram Rajan, Professor of Finance, University of Chicago, Booth School of Business, advised that one should stay away from "trade war particularly at a time when the economy the world over was in the process of recovery."

"I don't want to use the word trade war. I don't think they are there yet. But I do think that it is very important that we stay away because it could harm the current recovery which has been beneficial all over the world significantly.

"And for it to do that at a time when the US is quite strong and has got full employment is going quite reasonably, it seems to me that this is not the time that we should do it," the former RBI governor told reporters in response to a question related to trade war.

The former RBI governor is in India to address the two-day Global Digital Summit (#Future) organised by the Pinarayi Vijayan government in Kerala.

(With PTI inputs)