West Asia war, weak monsoon pose downside risk to growth, says finance ministry

India's economic growth is threatened by the ongoing West Asia conflict and the possibility of below-normal monsoon rains, according to the finance ministry's latest monthly economic review. The conflict has led to a 'supply shock' and rising energy costs, with India's crude oil basket averaging $113 per barrel in March. The ministry noted that passing on higher energy costs to consumers may be inevitable and that demand compression is a serious concern due to rising inflation. The Asian Development Bank (ADB) has lowered its developing Asia and Pacific growth forecast to 4.7% this year and 4.8% next year due to the conflict's impact on energy prices and economic activity. The finance ministry emphasized the need for balancing short-term growth support with medium-term fiscal stability and called for tax policy certainty and predictability.