New Delhi. The impact of increasing tension in West Asia and the conflict related to Iran is now clearly visible on the global economy as well as India. International rating agency Moody’s Ratings has reduced India’s economic growth forecast for the current financial year 2026-27 from 6.8% to 6%. This change is an indication that external circumstances may put pressure on India’s growth pace.
Why was the growth estimate reduced?
According to Moody’s, the supply of oil and gas may be affected due to the ongoing conflict in West Asia. India is largely dependent on imports for its energy needs, especially from the region. In such a situation, fuel prices are sure to increase due to supply disruption, which will have a direct impact on transportation, production and the pockets of common people.
danger of rising inflation
It has also been told in the report that at present inflation is definitely under control, but geopolitical tension can increase it again. It is estimated that average inflation may almost double to 4.8% in 2026-27. Especially, there may be a rise in the prices of food items, because India is largely dependent on imports for fertilizers.
impact on the pace of development
Moody’s believes that rising inflation will reduce people’s purchasing power, which may lead to a decline in private consumption. Besides, slowdown in industrial activities and decline in investment may also be seen. The combined impact of all these factors will be on India’s overall economic growth.
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