Page 4 - Policy Economic Report - March 2026

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

Executive Summary

The escalating conflict involving the United States, Israel, and Iran has created one of the most
significant geopolitical shocks to the global economy in recent years. While the military implications are
substantial, the economic impact is already becoming visible. The war is disrupting global trade routes,
pushing oil prices higher, and significantly increasing shipping and insurance costs, ultimately influencing
global trade

The severity of the economic consequences depends on how long it lasts. Before the war began, the IMF
expected the global economy to grow by 3.3% this year. The fund has not yet changed its outlook, but it
has been closely monitoring developments and listed several risks to the global economy, including
more trade disruptions, surges in energy prices and volatility in financial markets.

Goldman Sachs Research forecasts global real GDP to increase by 2.9% in 2026. In case of US, the real
GDP will expand 2.8% in 2026. The key driver is that the drag from tariff increases should give way to a
boost from business and personal tax cuts. Further, real wage gains and rising wealth may also help
sustain consumer spending growth, even as new tax incentives, easier financial conditions, and reduced
policy uncertainty would boost business investment.

In case of India, the Ministry of Statistics and Programme Implementation (MoSPI) has released the New
Series of Annual and Quarterly National Accounts Estimates with base year 2022–23, which replaces the
previous series with base year of 2011–12. The Financial Year (FY) 2022–23 has been selected as base
year, as it represents a recent normal year (after COVID), with availability of robust and comprehensive
data across sectors of the economy, making it an appropriate benchmark for the new series of Annual
and Quarterly National Accounts Estimates.

Key Highlights of New GDP Series (Base Year 2022-23)

? Real GDP has been estimated to grow by 7.6% in FY 2025-26. Nominal GDP has witnessed a
growth of 8.6%. These growth rates are revised upward from their respective First Advance
Estimates computed using previous Base Year (2011-12).

? Overall economic performance in FY 2025-26 is primarily on account of robust Real growth
observed in Second Quarter (8.4%) and Third Quarter (7.8%).

? The economy has exhibited sustained performance, recording Real GDP growth rates of 7.2%
and 7.1% respectively during FY 2023-24 and FY 2024-25.

? Nominal GDP has registered 11.0% and 9.7% growth rates during FY 2023-24 and FY 2024-25
respectively.

? Manufacturing sector has been the major driver in contributing to the resilient performance of
the economy in consecutive 3 financial years after rebasing. This sector has attained double digit
growth rates in FY 2023-24 and FY 2025-26.

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