new Delhi. Due to the war that broke out in Russia-Ukraine (Russia-Ukraine Conflict), there is a stir in the markets around the world. Foreign brokerage firm Nomura has said that this dispute will have the biggest impact on India in Asia. The brokerage firm says that due to this war, inflation will increase worldwide. This is very dangerous for the global economy recovering from the corona virus.
Nomura has said in its report that India is among those countries in Asia, which are going to be affected the most by this crisis. After the attack on Ukraine on Thursday, the price of crude oil has crossed $ 100 per barrel. The authors of this report, Arodeep Nandi and Sonal Verma, have said that the high prices of oil and food will have an impact on the economies of Asian countries.
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more impact on these countries
Nomura has said that this will affect India, Thailand and the Philippines the most in Asia. Indonesia can benefit a little from this. Due to this crisis, there may be a surge in inflation in India and there may be an increase in the Current Account Deficit. High crude oil prices will have a deep impact on India’s financial position. Because India imports 85 percent of its oil requirement. According to an estimate, a 10% increase in the price of oil can lead to a decline of 0.2% in GDP.
Monetary rate may increase
The Reserve Bank of India (RBI) has indicated to maintain monetary policy accomodative. But there is also a possibility that if there is an increase in inflation, then the RBI can also make its policy strict. In the meeting of the Monetary Policy Committee earlier this month, the average inflation rate was expected to be 4.5 per cent in the next financial year.
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At the same time, according to QuantEco Research, an increase of $10 per barrel in India’s crude oil basket can reduce GDP growth by 0.10 percent. India’s growth rate has been projected to be 9.2 percent in the financial year 2021-22. A permanent 10 per cent increase could lead to a 1.2 per cent increase in WPI inflation and 0.3 to 0.4 per cent in CPI inflation.
Tags: Crude oil, Indian economy, Russia
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