How sharp crude oil price fall actually hurt Indian economy, JP Morgan’s Sajjid Chinoy explains


How sharp crude oil price fall actually hurt Indian economy, JP Morgan’s Sajjid Chinoy explains

While Indian economy apparently reaped huge benefits from a sharp fall in crude oil prices about three years ago, with the GDP growth topping 8% and defying a global slowdown, the oil price fall actually ended up hurting Indian economy’s competitiveness to a phenomenon called ‘Dutch Disease’, JP Morgan’s chief India economist Sajjid Z Chinoy said.

“In 1961, Holland gets a huge windfall of gas deposits, capital comes flooding in, they spend that windfall, the exchange rate appreciates, and the rest of the Dutch economy becomes uncompetitive,” Sajjid Chinoy said at a recent talk with The Indian Express.

“A little bit of the Dutch disease (a phrase in the economy) has happened to India. Our windfall is from lower oil — we spent it, the exchange rate went up, and that made the underline current account less competitive,” he added. Read More

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