Moody’s Warns Prolonged Hormuz Strait Blockade Could Hit India’s Economy!

Global rating agency Moody’s has warned that the blockade in the Strait of Hormuz may continue until the autumn season, potentially extending through October and November. In its latest report, the agency stated that the prolonged disruption could severely impact several economies, including India, due to rising energy and trade concerns. Moody’s estimated that GDP growth rates of major countries could decline between 0.2 percent and 0.8 percent if the situation continues.

The report also revised India’s GDP growth forecast for the financial year 2026-27 from 6.8 percent to 6 percent. Moody’s further warned that retail inflation, which stood at 3.5 percent in the previous fiscal year, could rise sharply to 4.5 percent during the current financial year. The agency noted that increasing inflationary pressure and global uncertainty may make monetary policy decisions more challenging for the Reserve Bank of India (RBI). Economists believe continued instability in the Hormuz Strait could have far-reaching effects on global fuel supply chains and financial markets.