• Sat. Oct 23rd, 2021

Rising world oil and coal costs pose macro dangers to India: Morgan Stanley

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Oct 14, 2021

The rising commodity prices expose India to macro risks including on the already elevated inflation and growth fronts, a foreign brokerage said on Thursday.
There has been 14 per cent jump in oil prices to USD 83 per barrel and 15 per cent rise in coal rate to USD 200 per metric tonne, analysts at Morgan Stanley said.
This rise in energy prices, specifically oil, has prompted concerns of higher inflation, slower growth and whether this could lead to disruptive monetary policy tightening, they said.
They added that there are upside risks to inflation, and growth will only improve from a two-year compounded annual growth rate, which will lead to normalisation of the policy.
Inflation will move back toward 5.5 per cent by the quarter ending March 2022 after remaining below the 5 per cent mark in the next few readings, it said, noting that a continued rise in energy prices, specifically oil, increases inflation risks.
Assuming a complete pass through, a 10 per cent rise in oil prices

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