Moody's Cuts India's Growth Forecast

Moody's Corporation===Moody s Ratings has cut India's economic growth estimates for the current fiscal year to 6 per cent from 6.8 per cent, citing the ongoing military conflict in West Asia. This conflict is expected to moderate growth momentum and raise inflation risks for India, primarily due to its significant reliance on crude oil and LPG imports from the region. Prolonged disruptions could lead to household shortages, higher fuel and transport costs, and spillovers to food inflation through imported fertilisers. Other agencies like the Organisation for Economic Co-operation and Development, EY, and Moody's Corporation===ICRA have also issued similar cautious forecasts. The report highlights fiscal risks from elevated oil, gas, and fertiliser prices, which could increase subsidy outlays and erode revenues, potentially slowing fiscal consolidation. The recent rise in global crude prices, following military strikes by the United States and Israel against Iran, exacerbates these concerns. India's current account deficit is expected to widen, and remittance inflows from the Gulf region are also vulnerable.