 Summary of this article
- Albert Park said crude oil prices are expected to remain elevated due to prolonged disruptions in West Asia, with average prices projected at USD 96 per barrel in 2026.
- Park also flagged concerns over rising fertiliser prices and the possible impact of El Niño on food production, warning of further pressure on food prices and crop yields.
Crude oil prices are expected to remain elevated for an extended period due to disruptions caused by the prolonged Middle East crisis, according to Albert Park.
"With a higher oil price expectation, we actually have it as USD 96 per barrel as average for 2026 as per the new reference scenario. It should stay elevated at USD 80 per barrel in 2027. So, our idea is that the oil prices are likely to stay higher for longer," Park told PTI in an interview.
He noted that futures markets are indicating higher prices extending further into next year than previously expected.
However, he added, "We have also seen always a kind of a premium of the spot market prices and the nearby futures market because there is such a shortage currently."
Speaking about the impact of the ongoing Middle East crisis on India, Park said it could shave 0.6 percentage points off the country’s GDP growth, reducing it to 6.3 per cent, while also significantly pushing up inflation during the current financial year.
In April, the Asian Development Bank projected India’sGDP growth to remain “robust” at 6.9 per cent in the current fiscal year and rise to 7.3 per cent in the next, driven by strong domestic demand. The bank had also forecast inflation at 4.5 per cent for the current fiscal.
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For India, Park said, "We do find that growth would be lower by 0.6 per cent (FY27). This is based on our model scenario. But it would not negatively affect growth next year. India would kind of bounce back next."
He added that inflation could rise by 2.4 percentage points this year to 6.9 per cent. |
