New Delhi: The West Asia conflict and weak monsoon pose a downside risk to Indian’s economic growth and may put pressure on inflation, fiscal and external deficits, the finance ministry said in its monthly economic review released on Wednesday.It, however, added that while seeking to sustain economic growth, policy is expected to safeguard medium-term fiscal and external stability.“While the West Asia conflict constitutes a significant supply shock with rising risks to inflation, trade, and financial flows, India’s domestic demand, policy buffers, resilient financial system, and sustained public investment provide some insulation. Whether they would prove adequate in the event of prolonged uncertainty about energy and fertilizer supplies is an important question,” it said. The report also said that some countries have begun to allow higher costs to be passed on to consumers as well as industry. “Some are yet to do so. But it is inevitable.” it added. TNN
