Former IMF Chief Economist and Deputy Managing Director Gita Gopinath has warned that elevated crude oil prices could reduce India’s economic growth to around 6%, below the IMF’s current forecast of 6.5%.
According to Gopinath, the impact of the recent oil price shock could extend well into next year, particularly if geopolitical tensions in West Asia continue for a prolonged period. Higher energy costs could affect both consumption and investment, creating downside risks for the Indian economy.
She has previously cautioned that a prolonged disruption in global energy markets could push crude oil prices significantly higher, increasing inflationary pressures and slowing economic activity in major importing nations such as India.
Recent assessments by the RBI and the Finance Ministry have also identified rising oil prices and continued conflict in West Asia as key risks to India’s growth and inflation outlook.
Despite these concerns, India remains one of the world’s fastest-growing major economies. However, economists warn that sustained high crude prices could impact household spending, corporate margins, and overall economic momentum in the coming quarters.
