Exclusive: Gita Gopinath Warns West Asia Crisis Could Deepen Inflation, Flags Risks For Small Firms

In an exclusive interview with India Today, former IMF Deputy Managing Director and Harvard professor Gita Gopinath warned that the ongoing West Asia conflict could severely impact the Indian and global economy. She cautioned that crude oil prices could surge to 140 dollars a barrel if tensions continue, leading to more fuel price hikes, inflationary pressure and slower growth. Gopinath said India is facing a major external shock due to its dependence on Middle East energy supplies, but added that the economy still has resilience through strong reserves and infrastructure spending. She also argued that a weaker rupee should not trigger panic, stressing that adjustment through prices and exchange rates is necessary during crises.