West Asia conflict threatens India’s growth outlook, inflation at risk: Finance Ministry
The ongoing West Asia conflict poses a significant supply-side shock to India's economy, threatening inflation and growth, according to the Finance Ministry's Monthly Economic Review for April. India's economic growth is estimated to be 7.6%, but risks are tilted to the upside for inflation and to the downside for economic growth.
India's economy faces a significant supply-side shock due to the ongoing West Asia conflict, with rising risks to inflation, trade, and financial flows. The Finance Ministry's Monthly Economic Review for April notes that prolonged uncertainty around energy and fertilizer supplies could test the resilience of India's macroeconomic stability. The El Nino Southern Oscillation is expected to keep India's Southwest monsoon below normal, further increasing inflation risks. The government has taken measures to temper cost pressures in critical sectors like agriculture. The Indian economy is estimated to grow at 7.6%, but the conflict has dented investors' confidence, affecting Emerging Markets and Developing Economies, including India.
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