Topic
economic outlook
Business India Government Sees GDP Momentum Intact, No Extra Borrowing Needed Despite Middle East Crisis
The Indian government remains confident in its growth outlook despite rising fuel and fertiliser import costs from the Middle East crisis, with sources saying GDP momentum is intact and no additional borrowing is needed. The government targets a fiscal deficit of 4.3% of GDP for FY27 and plans to reassess macroeconomic conditions in July after Q1 growth data.
Commodities Oil shock to inflation risk: How Middle East war is reshaping India's economic outlook
The Iran war is causing a severe oil shock for India, the world's third-largest oil importer. Benchmark crude surged to nearly $120/barrel, and natural gas prices rose 75%. The RBI now expects inflation to average 5.1% in FY27, up from 3.48% in April, and economic growth to slow to 6.6% from 7.7%. Supply disruptions at the Strait of Hormuz and higher fertiliser costs are compounding risks for key crops like wheat amid a potential El Nino.