Oil Prices: Growth rate will not be affected by rise in oil prices

Chief Economic Advisor (CEA) V Ananth Nageswaran said on Thursday that due to global slowdown and ongoing international tensions, there is little risk of a rise in oil prices and its impact on economic growth in the next financial year 2024-25.

Nageshwar believes that there will be a slowdown in economic activity before interest rates are reduced globally and his above statements are based on this assumption. Speaking at an economic conference organized by SBI, he said, 'I do not think that the energy demand will be sufficient that oil prices will increase in 2024. The geopolitical situation and what is happening with the movements of cargo ships in the Red Sea are relevant issues. But these are not serious enough to impact demand on a large scale. My view is that if oil prices increase, it will further soften economic activity. Nageswaran said, 'There is no reason for me not to have confidence in the RBI's estimate of seven per cent growth rate.'

Tata Sons Chairman N Chandrasekaran has said that the complexities of global governance will reach new heights in 2024, hence there is a need to be prepared for more disruptions and fluctuations. Chandrasekaran, in his New Year message sent to Tata Group employees, described 2023 as 'a turbulent year' and said that this year the world had to face unstable trends.

These range from rising geopolitical tensions to large-scale adoption of generative AI to incentives toward sustainability. He described the IPO of group company Tata Technologies and the announcement of the new Gigafactory as 'exciting steps' and expressed confidence that it will lead to aggressive growth in the coming decades.