FRANKFURT (Reuters) – Global inflation could surge in case of trade fragmentation caused by a trade war and growth is likely to take a hit, European Central Bank Isabel Schnabel said in a presentation on Wednesday.
A severe disruption in global trade could push up inflation by several percentage points in the initial years while ‘mild decoupling’ would have an impact below 1%, which could take years to dissipate, Schnabel said in her slides.
“Trade fragmentation is structurally harmful for economic growth and inflation,” she said.
(Reporting by Balazs Koranyi; Editing by Andrew Heavens)
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