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High Crude Prices May Hit Profits, But India’s Growth to Remain Among Fastest Globally
Even if crude oil prices reach $130 per barrel, India's economy could grow at 6.3%, compared to a projected 7.1% growth rate under normal conditions. India will remain among the world's fastest-growing major economies. Read what rating agency S&P said in its report:
India’s economy is projected to expand by 6.3 percent in the 2026-27 period, S&P said, even assuming an average cost of crude oil of $130 per barrel. With crude at just $85 per barrel, growth can be 7.1 percent, the highest among major economies.
S&P Director (Sovereign and International Public Finance Ratings) Yee Fern Phua said, "This figure is very strong compared to any major economy in the world. India's growth rate of 6.3 percent during this crisis is a strong signal, demonstrating better performance than other economies." However, the agency cautioned that disruptions in energy supplies or fuel shortages could pose risks. Furthermore, high crude prices could widen the current account deficit. Rising corporate costs could impact profits. Furthermore, rising inflation could put pressure on consumer purchasing power.
According to S&P, while spending on subsidies will be increased to help consumers deal with higher energy costs, thereby adding to fiscal strain, this is unlikely to impact the sovereign credit rating of India.
