Economic costs are increasing every day: Dr Sajjid Chinoy on impact of Iran war

Dr Sajjid Z Chinoy, MD and Chief India Economist at JP Morgan, discussed the escalating economic impact of the war on global and Indian markets. He noted that crude prices have surged 50 percent since the conflict began, creating stagflationary consequences worldwide with weaker growth and higher inflation. Chinoy emphasised that the crisis extends beyond price increases to actual energy availability concerns, particularly affecting liquefied petroleum gas and natural gas supplies. He warned that small and medium enterprises face disproportionate impact compared to large corporates with greater buffers. Chinoy stated that if the Strait of Hormuz remains closed for extended periods, stagflation will become unavoidable globally. He acknowledged that whilst India has adequate crude oil stocks through increased Russian imports, other energy sources like LPG remain at 70 to 80 percent of pre-crisis levels. Chinoy highlighted that India's strong starting position with 7 percent growth and sub-4 percent inflation provides some buffer, but stressed that external sector imbalances require careful monitoring.