The fierce war between Russia and Ukraine has been going on for the last 11 days. The impact of this conflict seems to be falling on the economies of many countries around the world including India. You can guess this from the fact that China has reduced its GDP target for this year to the lowest 5.5 percent in three decades. Talking about India, from the stock market to the prices of gold, the effect of war is visible here. On the other hand, rising crude oil prices have increased the risk of inflation in the country. Meanwhile, a report has claimed that the country’s GDP will decrease in the next financial year.
Demand for reduction of excise duty on oil
An English newspaper report has said that India’s GDP growth will be affected in the next financial year due to the Russia-Ukraine war. The supply chain is getting disturbed as the war progresses. Along with this, there has been a jump in the prices from crude oil to gas and gold. Due to which there is a danger of rising inflation in the country in the coming six to eight months. Apart from this, citing many factors including financial pressure and high current account deficit (CAD) in the report, economists have expressed the possibility of the country’s GDP growth to be less than 8 percent in FY 2023. Along with this, experts have demanded reduction of excise duty on oil to reduce the effect of inflation on the people of the country.
Effect of Crude Oil Prices
While Ukraine is burning due to Russia’s attack, on the other hand, crude oil prices are also on fire. On Monday, the international crude oil price reached the highest level since 2008. Yes, crude oil touched a new peak of last 14 years after $139 per barrel. HDFC Bank also expects the CAD to be at 2.3 per cent in FY 2023. The report quoted experts as saying that every $10 increase in the average international crude oil price would increase the CAD by $14 to $15 billion.
This estimate was expressed in the Economic Survey
Significantly, in the Economic Survey put forward by the government before the presentation of the country’s general budget on January 31, the GDP growth in the financial year 2023 was estimated to be between 8 and 8.5 percent. A few days ago, the International Monetary Fund had projected India’s gross domestic product growth at 7.1 per cent for this year. Let us inform that Japanese research agency Nomura had also said in its recently released report that if the war between Russia and Ukraine drags on, India will suffer the most from it in the whole of Asia.