S&P Global Ratings on Tuesday upped India’s GDP growth forecast for the current fiscal to 6.5 per cent, citing lower crude prices, monetary easing and normal monsoon, and said the ongoing geopolitical tensions are unlikely to put a “significant pressure” on the rupee or inflation. In its Asia Pacific Economic Outlook, S&P flagged rising risks to the global economy due to the turbulence in the Middle East, saying long-lasting major increase in oil prices could have significant economic impact in Asia-Pacific, notably via slower global growth and pressure on the current accounts of net energy importers, prices and costs. S&P Global Ratings Economist Vishrut Rana told PTI a key mitigating factor of India is that energy prices are still lower than last year --? Brent crude oil traded at roughly USD 85/barrel a year ago and current prices are still lower.

 

“This will help contain both current account outflows and domestic energy price pressures -- while energy prices may rise moderately, the path of food prices will have a higher impact on inflation. Overall, we do not expect significant pressure on the Indian rupee or inflation,” Rana said. India imports more than 85 per cent of its crude oil and roughly half of its natural gas requirement. More than 40 per cent of the oil imports and half of gas imports come from the Middle East. Rates of the benchmark Brent crude futures fell to around USD 69 a barrel on Tuesday morning after US President Donald Trump announced that Israel and Iran have agreed to a “complete and total ceasefire”.

 

S&P in its quarterly report on Asia Pacific economies said current conditions on global energy markets--which are well-supplied-- make long-term impact on oil prices leading to price rise unlikely. In the FY25 fiscal, Indian economy grew 6.5 per cent. S&P’s FY26 growth estimates for India is in line with the projections made by central bank RBI earlier this month at 6.5 per cent.