IMF warns oil prices and weak monsoon are key risks to India's FY27 GDP growth
The International Monetary Fund (IMF) has identified rising oil prices due to the expanding Middle East conflict and a weak monsoon caused by El Nino as the two biggest downside risks to India's GDP growth for fiscal year 2026/27. India, which imports nearly 80% of its oil, is highly vulnerable to energy shocks that could stoke inflation and slow growth. The IMF recently cut its FY27 growth forecast for India by 10 basis points to 6.4%, while raising the FY28 forecast to 6.7%. IMF senior resident representative Ranil Salgado noted that the war's expansion threatens oil supplies via the Strait of Hormuz, and that the weak monsoon could further impact the economy. Additionally, the IMF plans to reassess the quality of India's national accounts later this year, following previous methodological concerns that led to a low 'C' rating.
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