International economy determines international trade, and international trade is greatly intertwined with international trade finance. Trade finance is the grease that keeps the wheels of international trade moving.

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The global economy is expected to grow at less than three percent and likewise, international trade volumes are also expected to fall to less than 1 percent after a decent growth last year. Therefore challenges are aplenty.

In an interview with CNBC-TV18, Steven Beck, Head of Trade Finance at Asian Development Bank (ADB), said one of the primary reasons for the trade financing gap getting larger is inflation. He believes increasing trade financing gap is restricting growth as well as negatively impacting sustainable development goals.

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"Trade is critical for development, it has lifted millions of people out of poverty. However if we don't have sufficient financing to back trade led growth then we are not going to be able to get the maximum development impact, the maximum gains that we can from trade," he said.

"However there are substantial gaps in trade financing and it is getting larger with time. One of the primary reasons for the gap getting larger is inflation. Financial institutions have a country limit to support trade, but the value of that limit has in real terms has reduced because now the value of the transactions has gone up substantially," he added.

"The country limits to support trade have not increased, in fact if anything a lot of financial institutions have reduced their exposure and that has exacerbated the whole situation with respect to trade financing gap. It is something we need to be concerned about because it is hitting our ability to grow and to reach our sustainable development goals," he further said.

Watch video for entire discussion.