According to an FE analysis and estimates by economists, crude at $100 could push up CPI inflation by 60 basis points (bps) from the RBI estimate which pegged oil at $85, assuming full pass-through to retail consumers of auto fuels. It could also inflate the oil import bill by $2.5-3 billion and increase fertiliser subsidy for FY25 by at least 5% from the Budget estimate of 1.64 trillion.
Oil around $100 could likely delay the beginning of the rate cut cycle by the Reserve Bank of India (RBI). "If crude oil prices sustain higher than $100/bbl, it can delay monetary policy easing beyond Q3FY25," said Dhiraj Nim, economist, ANZ Banking Group.
A $100/bbl price of crude, or India's crude oil basket, will lead to a rise in inflation, decline in growth and widening of both current account deficit (CAD) and fiscal deficit, say economists.
Denne historien er fra April 16, 2024-utgaven av Financial Express Mumbai.
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Denne historien er fra April 16, 2024-utgaven av Financial Express Mumbai.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
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