Economics · Macroeconomic Stability & Risk Analysis
Suppose a major global geopolitical conflict leads to severe shipping route disruptions, tripling freight rates and increasing energy prices for India. Evaluate the most significant systemic risk to India's macroeconomic stability in this scenario and the main concern for regulatory authorities.
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The only risk is the domestic shortage of agricultural exports as all stocks are bartered for oil.
- 2The risk is that foreign clients will start paying for services in gold, leading to a physical storage crisis.
- 3The risk is a 'Triple Whammy' of high inflation, a widening Current Account Deficit (CAD), and a slowdown in growth.✓
- 4The primary risk is a shortage of physical currency notes due to transport route blockages.
Correct answer
The risk is a 'Triple Whammy' of high inflation, a widening Current Account Deficit (CAD), and a slowdown in growth.
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