India vulnerable to oil shocks – RBI research

oil drilling

India’s open economy leaves it vulnerable to the effects of oil shocks, according to research published by the Reserve Bank of India.

The study, by Saurabh Ghosh and Shekhar Tomar, seeks to quantify the impact of oil price changes on India’s “three major macro-stability indicators”: the current account deficit, inflation and the fiscal deficit.

An increase in crude oil prices will tend to widen the current account deficit, and can add to inflation. However, the government may choose to absorb

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