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IMF warns higher oil prices could drag India’s 2026/2027 growth
The IMF linked the outlook to a renewed Middle East escalation that pushed Brent up 16% in a week, alongside El Nino risk to the monsoon.
The IMF warned that India’s economic growth for the 2026/2027 fiscal year could come in below earlier expectations as higher oil prices weigh on the economy, according to comments shared with Reuters by Ranil Salgado, the IMF’s resident representative for India and Bhutan.
OilPrice, citing the Reuters interview published Tuesday, said Salgado described two downside risks: renewed expansion of the Middle East war that could lift oil prices, and El Nino conditions that could lead to a poor monsoon.
The IMF recently lowered its India GDP growth forecast by 10 basis points, to 6.4% for the fiscal year ending March 31, 2027, from 6.5% expected in April, blaming higher energy prices.
The article also notes that the U.S.-Iran ceasefire was mostly holding earlier in July before collapsing, and that renewed closure of the Strait of Hormuz and escalation in the region lifted oil prices by 16% in one week to nearly $90 per barrel Brent, with India facing greater pass-through of those costs to fuel pumps.
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