India flags economic growth risks from Middle East conflict
Indian government warns that the Middle East conflict and rising energy costs pose risks to growth forecasts. Supply disruptions strain the current account.
India has issued a warning regarding potential downside risks to its economic growth projections for the upcoming fiscal year starting April 1. According to the government’s latest monthly economic report, the current growth forecast of 7.0% to 7.4% faces significant pressure from rising energy costs and supply chain disruptions linked to the ongoing conflict in the Middle East.
The geopolitical situation, which escalated following military actions involving the United States and Israel against Iran, has compromised a vital shipping route responsible for the transit of 20% of the world’s oil. This disruption has driven up freight costs and strained global supply chains, leading to heightened concerns over domestic inflation and overall economic stability in India.
