Despite rising global oil prices due to the Iran-Israel conflict, experts believe India’s macroeconomic health remains stable as long as the crisis remains contained.
Key Economic Indicators
- Retail Inflation: India’s CPI eased to a 75-month low of 2.82% in May, with food inflation dropping below 1% for the first time in four years.
- Fuel Prices: While crude oil surged 13% on June 13, India’s fuel inflation continued its downward trend, standing at 2.78% in May.
- Current Account Deficit (CAD): Experts suggest that India’s CAD will remain manageable unless oil prices exceed $100–120 per barrel.
Expert Opinions on Oil Price Impact
- Devendra Pant (India Ratings): “If oil prices stay around $80–85 per barrel for a longer period, India may need to start worrying. But for now, inflation is well under control.”
- Sri Hari Nayudu (NIPFP): “If we secure uninterrupted oil supplies and prices don’t escalate significantly, the impact will be limited.”
Future Outlook
India’s strong economic fundamentals and diversified crude imports from Russia and the U.S. are expected to shield the economy from major disruptions.
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