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Iran war shock: Middle East conflict could cut 1 ppt from Indias FY27 GDP outlook

Iran War: A persistent Middle East conflict could reduce India's real GDP growth by 1 percentage point and increase retail inflation by 1.5 percentage points from baseline estimates. This impact stems from disruptions to global oil and energy markets, affecting employment-intensive sectors and aggregate demand. The government may need to implement countercyclical policies and augment the Economic Stabilization Fund.

31 Mar 2026 1:49 pm