Large oil importers like India and Thailand will be the most affected among Asia-Pacific countries by the ongoing Russia-Ukraine war, S&P Global Ratings has said.
S&P estimates the Indian economy to grow 7.8 per cent in the next fiscal year beginning April 1, 2022. Besides, the economy is expected to grow 6 per cent and 6.5 per cent in 2023-24 and 2024-25, respectively.
It projected inflation at 5.4 per cent in the current fiscal year.
It said banks in the Asia-Pacific (APAC) region have little direct exposure to Russia, which will soften the impact of the conflict, but relative downside risks -- particularly actual and potential secondary economic and other risks -- lie ahead.
"The biggest risk of the Ukraine conflict is market volatility and higher commodity prices; emerging economies with large energy imports are most at risk," S&P said in a report.
India relies on overseas purchases to meet about 85 per cent of its oil requirement, making it one of the most vulnerable in Asia to higher oil prices.
International oil prices had climbed to a 14-year high of near $140 per barrel last week on fears of supply disruption following Russia's invasion of Ukraine beginning February 24. Rates have since eased to around $100 per barrel.
"India and Thailand are large oil importers and will be the most affected among large Asia-Pacific countries," S&P said.
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