How El Niño could damage India’s economy | Explained
India faces a potential economic slowdown due to a weak monsoon season caused by El Niño, which threatens agricultural output and rural income. The government and central bank have expressed concerns regarding the impact on food inflation and crop yields.
Why it matters
Agricultural performance is a critical driver of India's GDP and inflation, making climate-related disruptions a major risk to the nation's economic stability.
After the first month of this year’s monsoon ended in a massive 40% deficit , the India Meteorological Department has forecast that rainfall in July will also be “below normal” or less than 94% of what is usual for the month. “Below-normal rainfall can pose significant challenges for agriculture, water resources, hydropower generation, ecosystem sustainability, and drinking water availability,” the agency warned. The outlook for July comes on the back of weak rainfall in June.
The report relies on official data from the IMD and government statements, presenting a balanced view of economic risks.
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