Middle East conflict clouds India’s FY27 GDP forecast of 7-7.4%: Govt

The Middle East crisis has weighed on India’s industrial performance in early fiscal 2026-27 (FY27), with softening business sentiment and e-way bill growth declining from its near-30-per cent peak in November last year, according to the department of economic affairs (DEA) monthly economic review for April.

A ‘supply shock’ is apparent in the economy, it noted.

Other high-frequency indicators point to a degree of supply-side moderation in March, while demand-side indicators remain reasonably resilient.

The Middle East crisis has weighed on India’s industrial performance in early FY27, with softening business sentiment and e-way bill growth declining, the department of economic affairs said.
A ‘supply shock’ is apparent in the economy, it noted.
Though the crisis has slightly dampened bankers’ optimism regarding loan demand and terms for the Q1 FY27, financial instability is not a threat, it said.

Rising wholesale prices indicate emerging cost-push pressures that could transmit to consumer inflation if supply disruptions persist, said the report.

Though the crisis has slightly dampened bankers’ optimism regarding loan demand and terms for the first quarter (Q1) of FY27, financial instability is not a threat, it noted.

An accompanying demand compression is a serious concern, given high prices, rising inflation, and a reduced pace of economic activity, it added.

Fibre2Fashion News Desk (DS)