Indicators
India Faces Headwinds from External Sector, Government Says
A shopper browses watches under a lamp on Brigade Road in Bengaluru, India.
Photographer: Dhiraj Singh/BloombergThis article is for subscribers only.
India’s economy faces risks from the external sector, the nation’s finance ministry said in its monthly report, flagging that foreign capital inflows could be hurt as the Federal Reserve tightens monetary policy and concerns about elevated global energy prices cloud the near-term outlook.
“On the one hand, the Federal Reserve continues to be aggressive in the fight against inflation, thereby signaling further interest rate hikes. This may lower capital inflows, increase pressure on the rupee to depreciate, and make imports of essential commodities costlier,” according to the report released Saturday.