Fiscal balance

Geopolitical tensions have increased risks

Renewed geopolitical tensions in West Asia have significantly increased economic and policy risks. Even though there have been attempts to contain the crisis, the potential involvement of other regional and global powers in the ongoing Israel-Palestine conflict can increase risks in ways that may be difficult to anticipate at this stage. The most obvious risks would be to global growth and the supply of crude oil. Although crude oil prices have increased, partly also because of voluntary production restrictions by large producers, a material disruption in supplies could affect both availability and prices. Since India depends on imports for the