GlobalData, a London-based data analytics and consulting company, on Friday said it has lowered India's economy growth forecast to 7.8 per cent for 2022 due to the nation's exports being impacted by the Russia-Ukraine war and spiking oil prices causing ripple effects. In a statement, it said rupee is likely to further depreciate against US dollar while soaring commodity prices will push inflation up. However, Indian banking sector will likely remain resilient.
"The ongoing Russia-Ukraine war will have a negative impact on India's exports and spike in oil prices will cause ripple effects on input prices and consumer goods leading to inflationary pressures.
"Against this backdrop, GlobalData revises down the country's economy growth forecast by 0.1 percentage point to 7.8 per cent for 2022," the statement said.
Ukraine and Russia together accounted for 2.2 per cent share of total imports of India in 2020. India mainly imports mineral fuels (34 per cent of the total imports), natural pearls and semi-precious stones (14 per cent), fertilisers (10 per cent), petroleum oils and crude (5.6 per cent) from Russia, and animal or vegetable fat and oils (74.9 per cent of the total imports), fertilisers (11 per cent), and inorganic chemicals (3.5 per cent) from Ukraine.
The prices of these items are projected to shoot up in the short-term, GlobalData said.
Gargi Rao, Economic Research Analyst at GlobalData, commented, "In the short-term, Indian traders may feel the pinch of higher oil and gas prices along with delays in shipment and movement of assignments across Black Sea."
Inflation rate is already on the rise due to increase in prices of fuel and edible oils.
GlobalData forecast that the ongoing geopolitical risks arising from the Russia-Ukraine war would further push the inflation rate to 5.5 per cent in 2022 compared to 5.1 per cent in 2021.nt climate might deteriorate.