Nomura has estimated the net impact of rise in crude oil prices would be negative. “For a net oil importer like India, a sustained rise in crude oil price would have adverse macroeconomic implications,” Nomura said in a report. On the current account balance front, Nomura has estimated the net impact of rise in crude oil prices would be negative, with “every $10/bbl rise in crude oil price worsening India’s annual current account balance by 0.4% of GDP”. At the same time, it also estimates that every $10/bbl rise in crude oil price would hit the central government’s fiscal balance by 0.1% of GDP. “Higher oil prices also have an indirect impact via higher production and transportation costs and could exert upward pressure on food inflation, at the margin.” it added.

Source: Mint November 05, 2017 09:22 UTC