New Delhi, April 5 Moody's Ratings has lowered India's economic growth estimates for the current fiscal year to 6% from the previously estimated 6.8%, citing the ongoing conflict in West Asia as a factor that will moderate growth and increase inflationary risks.
In its credit opinion report on India, Moody's stated that prolonged disruptions, particularly due to the conflict, would lead to shortages of household goods, higher fuel and transport costs, and increased food inflation due to India's reliance on imported fertilizers.
The region accounts for approximately 55% of crude oil imports and over 90% of liquefied petroleum gas (LPG) supplies to India.
"While inflation remains contained for now, geopolitical risks have increased the outlook for inflation," Moody's stated, projecting an average inflation of 4.8% in FY27, up from 2.4% in FY26.
Given the resurgence of inflation and robust growth, policy rates are likely to remain steady or increase gradually in fiscal year 2026-27, depending on the duration of geopolitical tensions and their impact on food and fuel prices, Moody's said.
According to a Moody's report dated March 31, accessed by