West Asia war unlikely to trigger recession in India, but economic slowdown expected. Bank of Baroda chief economist Madan Sabnavis projects GDP growth may decelerate to around 7% from the current 7.2-7.25% forecast. While inflation remains relatively controlled, prolonged conflict could push consumer prices up 0.5-1% if crude oil stays elevated. If the war extends six to eight months, inflation could reach 4.5-5%, with households perceiving it closer to 7%. Government fuel subsidy absorption has limited immediate impact, but extended high oil prices may force price increases. Household consumption patterns could shift as inflation erodes savings capacity. Long-term borrowing for homes and vehicles remains unaffected, with consumers potentially accelerating purchases to lock in current prices before further inflation materializes.
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