India’s GDP Growth Likely At 6.6 Per Cent In FY27; Inflation May Average 5.1 Pc: Crisil
Crisil has projected India’s GDP growth at 6.6% in FY27 while estimating average retail inflation at 5.1%. The report cited rising crude oil prices, geopolitical tensions in West Asia and possible El Niño-driven monsoon disruptions as major risks to India’s economic growth and inflation outlook.
Crisil projects India’s GDP growth at 6.6% for FY27 amid concerns over rising crude oil prices and inflationary pressures | Representative Image
New Delhi, May 11: India’s gross domestic product (GDP) is expected to grow 6.6% in fiscal 2027, while retail inflation will average 5.1% in FY27 amid geopolitical tensions, a report said on Monday.
Crisil raises crude oil price forecast
Prolonged closure of the Strait of Hormuz has pushed Brent crude price forecasts up to $90-95 per barrel from $82-87 previously and is expected to keep crude oil prices elevated for longer, the report from Crisil Ratings said.
The ongoing conflict has underscored the importance of building resilience in energy and food security amid the shifting geopolitical scenario, which will be essential for sustaining high growth over the long run, it said.
West Asia conflict triggers energy shock
The de facto shutdown of the Strait of Hormuz for over two months has created the largest energy shock on record, with S&P Global estimating supply losses of at least 10% of global oil and derivatives output.
The shock has widened beyond energy to freight, insurance, fertilisers and supply chains, and will take time to normalise due to damage to oil and gas infrastructure in West Asia even after the route reopens.
Crude oil prices remained above $100 per barrel since the middle of March and crossed $110 per barrel in April despite the ceasefire.
El Niño may impact growth and inflation
Besides the repercussions of the ongoing West Asia conflict, El Niño conditions leading to a sub-normal monsoon are also expected to impact India’s growth-inflation mix this fiscal, the firm said.
Input cost pressures have increased significantly for producers, which will drag GDP growth and push up retail inflation.
The government so far has limited the pass-through of higher energy prices to consumers and has announced some steps to cushion the industry.
Also Watch:
ALSO READ
Higher inflation may hit consumption
Higher inflation on account of disruptions to agricultural production and higher commodity prices will constrain household budgets and restrain private consumption, the report warned.
(Disclaimer: Except for the headline, this article has not been edited by FPJ's editorial team and is auto-generated from an agency feed.)
RECENT STORIES
-
-
-
-
-