Economists say the Russia-Ukraine conflict will directly impact India’s economic growth
As the Ukraine-Russia conflict intensifies, it could impact the growth of the Indian economy in the long run, according to economists.
Renowned economist Kirit Parekh told NDTV that crude oil prices hit $100 a barrel even before Russia invaded Ukraine. Now, after the Russian invasion, crude oil prices are under more pressure and they are likely to remain high in the near term.
This will have an impact on the country’s import bill, Mr. Parekh said.
If this happens, the country’s economic growth will likely slow down in the long run as well, he noted. At the same time, he thinks that the prices of other items that India imports will also increase in the international market.
Mr. Parekh commented: “Due to this pressure on the global economy, demand may suffer and may also affect our exports.
As a result of Russia’s attack on Ukraine, uncertainty has increased in global trade and this will also affect oil and other sectors, said Sunil Sinha, director of research and chief economist at India Ratings. other items.
He added that all of this will directly affect the Indian economy, as India imports oil from Russia and sunflower oil from Ukraine.
Mr. Sinha added: “As prices are rising in the global commodity market, this affects our import bill and leads to inflation.
In its second advance estimate of the national accounts, the National Statistics Office (NSO) had forecast economic growth of 8.9% for the period 2021-22, lower than the first prior estimate released. father in January. At the time, NSO had forecast 9.2% growth for 2021-22 compared with a 6.6% contraction for 2020-21.
In the third quarter of the current fiscal, GDP growth stood at 5.4%, lower than the 8.4% increase in the second quarter.
Rating agency ICRA also said that the short-term impact of Russia’s invasion of Ukraine on India will be due to inflationary pressures, given the country’s dependence on imported oil.
Some sectors such as oil and gas and both ferrous and non-ferrous metals can gain through this trend, while those that depend on oil as a major input such as chemicals, fertilizers, gas utilities burning, refining and marketing, will have a negative impact, ICRA said in a report.
