"We will have to revise our projections downwards, if oil prices remain at $70 a barrel," Ifzal Ali, chief economist, Asian Development Bank said, adding that surging crude prices were a matter of concern for India and some other countries in the region.
Projection for economic growth in India for this fiscal was based on oil prices at $62 a barrel, he said, adding that a $10 dollar rise in oil prices mean 1.2 per cent reduction in India's GDP growth, as per an ADB study.
Even the 7.6 per cent growth rate projection was based on the assumption that investment and consumption will be held back this fiscal because of higher fuel prices which would push up inflation.
However, growth would only be marginally impacted if the meteorological department's prediction of seven per cent shortfall in rainfall comes true since contribution of agriculture to India's growth has substantially shrunk over the years, Ali said after a book release function.
Manila-based ADB projected Indian economy to grow at 7.6 per cent this fiscal and 7.8 per cent in 2007, slightly below the medium term rate of growth.
India's growth has averaged more than 8 per cent over the past three years driven by broad-based domestic demand and expensive business dynamics.
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