Commodity slump ripples run through global economy
Price pressures could ease further if natural resources keep falling; bad news for exporters such as Saudi Arabia and Brazil but good news for net importers.
"The fall will help us deal with the widening current account deficit, which is the biggest worry for the government," said a senior official at the ministry of finance in New Delhi.
India spent $169 billion on foreign oil in the fiscal year that ended in March, 9 percent more than the year before. That is a big factor behind a full-year current account deficit likely to have been around 5 percent of GDP - a level the central bank governor has called unsustainable..
And because India heavily subsidises consumer fuels and fertilizer, the government's budget deficit for the new fiscal year could well come in below its target of 4.8 percent of GDP if global commodity prices keep declining, the official added. The fall in crude prices could halve the oil subsidy bill.