By Admin 
- Crude oil prices are expected to rise due to the Middle East crisis.
- The Asian Development Bank projected a decline in India’s GDP growth.
- Increase in crude oil prices will increase inflation in India.
- Global tension will have a direct impact on India’s economy.
Iran-US War Impact: The increasing tension in the Middle East is affecting the economy of the entire world and now its effect can be seen on India too. Asian Development Bank (ADB) has warned that due to the ongoing crisis in the Middle East, crude oil prices may remain high for a long time. This may increase inflation in India and also affect the economic growth rate.
Crude oil prices may remain high
According to PTI report, ADB Chief Economist Albert Park said that if the Middle East crisis continues for a long time, there will be a big impact on the supply chain and there may be an increase in the prices of crude oil. According to him, the average price of crude oil in 2026 could be $96 per barrel. Whereas in 2027 it may remain around $80 per barrel.
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India’s GDP growth will be affected
Albert Park said that this crisis will also affect India’s economic growth rate. ADB estimates that India’s GDP growth may decline by 0.6 percent and may come down to 6.3 percent. It is noteworthy that in April, ADB had estimated India’s GDP growth to be 6.9 percent for the current financial year, while it was expected to reach 7.3 percent in the next financial year. But it is a matter of relief that the Indian economy can get back on track next year.
Can inflation increase?
The impact of rising crude oil prices will not be limited to GDP only. Along with this, inflation may also increase in India. ADB had earlier estimated the inflation rate for the current financial year at 4.5 percent, which has now been increased to 6.9 percent. This means that inflation may see a jump of up to 2.4 percent.
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Why will inflation increase?
India imports a large part of its oil and gas needs from abroad. In such a situation, if oil and gas become expensive in the international market, then it directly impacts India. Apart from this, due to increase in gas prices, fertilizers and fertilizers will become expensive, which will increase the costs of farmers.
If farmers use less fertilizer, crop production may decrease. This will directly affect the prices of food items. That means, it is clear that if the tension in the Middle East continues for a long time, it will have a direct impact on inflation in India, which will have a direct impact on the pockets of the common people.