HomeTop StoriesEscalation of Iran-Israel conflict to impact inflation, oil price, interest rates in...

Escalation of Iran-Israel conflict to impact inflation, oil price, interest rates in India: Acuite Ratings & Research

Chennai, April 18 (IANS) The price of crude oil would breach $100, the central bank may delay cutting the repo rate over uncertainty over disinflation, exports to West Asia may be affected and an increase in shipping costs are some of the likely impact if the conflict between Iran and Israel escalates, said a top economist at Acuite Ratings & Research.

“With the drone and missile attacks on Israel by Iran, there is a perceptible increase in the geo-political risk quotient, imparting higher uncertainty to the global economic outlook. Although crude oil prices are yet to rise sharply beyond $90 per barrel, there is a significant likelihood that it will breach the $100 level if the conflict intensifies further over West Asia,” Suman Chowdhury, Chief Economist and Head-Research, Acuite Ratings said.

According to him, the US Federal Reserve and Reserve Bank of India (RBI) would delay cutting the interest rate owing to the increased geopolitical risks and uncertainty on disinflation.

Further, there will be higher under-recoveries for the public sector oil companies in India if the increase in crude prices are not passed on to the consumers of petrol, diesel and LPG.

“The oil subsidy bill is likely to be above the interim budget for FY25. If the price rise is sustained, there is also a likelihood of pass-through after the elections,” Chowdhury said.

Similarly, the prices for oil derivatives are likely to rise, impacting the operating margins for sectors like petrochemicals, speciality chemicals, and paints.

In the area of exports-imports, the escalation in conflict will result in increase in shipping costs for imports pushing up the wholesale inflation; merchandise exports to West Asia might slowdown.

“While we have a forecast of 6.7 per cent and 5.0 per cent for GDP growth and retail inflation in FY25, these can become vulnerable to revisions if the Iran – Israel conflict escalates further,” Chowdhury added.

–IANS

vj/svn

Go to Source

Disclaimer

The information contained in this website is for general information purposes only. The information is provided by TodayIndia.news and while we endeavour to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the website or the information, products, services, or related graphics contained on the website for any purpose. Any reliance you place on such information is therefore strictly at your own risk.

In no event will we be liable for any loss or damage including without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever arising from loss of data or profits arising out of, or in connection with, the use of this website.

Through this website you are able to link to other websites which are not under the control of TodayIndia.news We have no control over the nature, content and availability of those sites. The inclusion of any links does not necessarily imply a recommendation or endorse the views expressed within them.

Every effort is made to keep the website up and running smoothly. However, TodayIndia.news takes no responsibility for, and will not be liable for, the website being temporarily unavailable due to technical issues beyond our control.

For any legal details or query please visit original source link given with news or click on Go to Source.

Our translation service aims to offer the most accurate translation possible and we rarely experience any issues with news post. However, as the translation is carried out by third part tool there is a possibility for error to cause the occasional inaccuracy. We therefore require you to accept this disclaimer before confirming any translation news with us.

If you are not willing to accept this disclaimer then we recommend reading news post in its original language.

RELATED ARTICLES
- Advertisment -

Most Popular