Indias retail inflation may average below 6% even if crude oil prices average $100 a barrel in 2022-23, but rising prices remain an elevated risk to growth especially as private consumption remains subdued, rating firm Crisil said on Thursday.
Assuming a full pass-through of global crude prices to retail fuel prices in India, Crisil expects average consumer inflation to be 5.4% if oil prices average $85-90 a barrel, and rise to 5.8% if the mean crude price is at $100 a barrel through the next fiscal year.
Headline inflation, however, is expected to be lower than the last time oil prices shot past $100 a barrel during 2012-14, a period when food and core inflation were also high, Crisil observed, adding that such a scenario was unlikely to repeat in 2022-23.