Rising oil, coal prices may pose risks to economy: Analyst

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Coal mine in Chhattisgarh, symbolic photo | Photo: Special Arrangements
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Mumbai: Rising commodity prices may pose risks to India on the macro-economic front. This includes inflation and economic growth. In this, the inflation rate has already remained high. A foreign brokerage company said this on Thursday.

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Analysts at Morgan Stanley said oil prices rose 14 percent to $83 a barrel and coal prices also rose 15 percent to $200 a tonne.

“The growth in energy prices, especially in the case of oil, and high inflation are raising concerns of slow growth,” he said. At the same time, it has also increased the fear that perhaps due to this monetary policy may be tightened.

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Analysts said there is a risk of further escalation of inflation and growth will improve only at a two-year compound annual growth rate, which will bring policy back to normal levels.

After staying below the five per cent level over the next few months, inflation will move to 5.5 per cent by the quarter ending March 2022 and continued growth in energy prices, especially in oil, poses a risk of further inflation, he said.

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