Analyst: Iran conflict has a greater impact on India's economy than inflation

Golden Ten Data reported on March 5th that, according to informed sources and analysts, the negative impact of the US and Israel's attack on Iran on India's economic growth will be greater than its impact on inflation, prompting the Reserve Bank of India to maintain low interest rates. This conflict has spread to most parts of the Middle East, causing oil prices to rise by about 15%, disrupting the region's natural gas supply, and triggering sell-offs in India's stock, bond, and currency markets, with the Indian rupee hitting a historic low. However, sources revealed that despite the rupee's depreciation and rising crude oil prices, the central bank is unlikely to take a hawkish stance. Sources believe that one of the urgent risks facing India's economic growth is the interruption of natural gas supply. If the disruption lasts more than four weeks, it could have a negative impact on the economy for at least one quarter. The source also stated that if oil prices remain at $90 to $95 per barrel for three to four consecutive quarters, India's expected economic growth rate of over 7% in the next fiscal year will suffer a more lasting blow. In that scenario, the growth rate may slow from the current forecast of over 7% to about 6.5%. He said: "If oil prices remain high for a long time, India's 'golden opportunity period' will come to an end." However, one of the sources pointed out that, given the possibility of extreme changes in the Middle East situation, the current assessment may be adjusted.