Chief Economic Adviser V Anantha Nageswaran has cautioned that if crude oil prices spike and remain around $130 for a two to three quarers, it would have “fairly signifiant” impact on the Indian economy by dragging the Gross Domestic Product (GDP) growth down from 7.4% to 6.4% for 2026-27, while also pushing inflation toward 5.5%. Such a scenario could also widen the current-account and fiscal deficits to 3.2% and 5.6% of the GDP respectively, he said. Briefing the Parliamentary Standing Committee on Finance on March 2 about the implications of the West Asia crisis for the economy, the CEA said: “If the shock is short-lived and temporary, then even if it (oil) escalates to $130, it will not matter. So, by and large, the answers we get suggest that, up to 90 dollar per barrel, the macroeconomic assumptions for 2026-2027 of achieving around 7% to 7.4% real GDP growth, inflation remaining at or around 2%, a current account deficit between 1% and 1.2%, and a fiscal deficit being around 4.3% to 4.4% will be feasible.”