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Surge in oil prices, deficit may hit India: World Bank

C K Arora in Washington

The World Bank has hinted at the possibility of two factors -- surge in oil prices and high fiscal deficit -- adversely affecting India's economy in the near-term, telling upon its high growth path.

Its report ''Global economic prospects and the developing countries'', released yesterday, notes that domestic business confidence in India is strong and the two major political parties - the Bharatiya Janata Party and the Congress -- are committed to a broad range of economic reforms.

''But the fiscal deficit remains a serious concern,'' it adds.

It says the projections assume progress in macroeconomic stabilisation and conflict resolution throughout the region.

It says that all countries of the region will be adversely affected by the surge in oil prices but they should benefit from a jump in external demand, especially in Europe and, more generally, in Asia.

UNI

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