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Rising oil prices a risk for India’s economy

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The Indian economy is in for a rough ride, with rising oil prices set to continue weighing on its already-weakened currency, widen its deficit, and affect its growth outlook.

Rebounding oil prices — and India’s unrelenting demand for it — will push up oil imports and widen its current account deficit, which measures the flow of goods, services and investments into and out of the country, economists say.

That widening deficit will result in a weakening rupee, they say, as more imports mean India has to buy more foreign currencies to meet its needs.

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Craig Erlam

Craig Erlam

Senior Currency Analyst at OANDA
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.
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