India faces downside risks to its growth forecast of 7.0pc to 7.4pc for the next fiscal year starting April 1, due to higher energy costs and supply disruptions stemming from the Middle East conflict, according to its monthly economic report released today, Reuters reports.

The conflict has disrupted a key shipping route through which 20pc of the world’s oil passes, pushing up energy and freight costs and straining supply chains. This is raising concerns over inflation and growth in India, the government review said.

High-frequency data for April, and possibly May, should provide a clearer picture of growth prospects for the new financial year, India’s chief economic adviser V Anantha Nageswaran wrote in the report.

He said the current account deficit, which has already widened to 1.3pc of GDP in the Oct-Dec quarter of the current fiscal year, will significantly worsen in the next fiscal year.

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