IMD Predicts Above-Normal Monsoon, CRISIL Says Inflation Set To Remain In Control

The IMD has predicted above-normal rainfall during the southwest monsoon season (June to September), estimating it at 106 per cent of the long-period average.

About 41 per cent of the food inflation in fiscal 2025 stemmed from rising vegetable prices driven by adverse weather events such as heatwaves and excess rains in some areas, the report added.

Source : ABPLIVE AI

The India Meteorological Department’s (IMD) forecast of an above-normal monsoon is expected to lead to a robust increase in agricultural production and rural demand while helping to keep inflation under control, according to a Crisil report released on Wednesday.

The IMD has predicted above-normal rainfall during the southwest monsoon season (June to September), estimating it at 106 per cent of the long-period average.

“If the forecast, which would mark the second consecutive year of above-normal monsoon, comes true, the economy could expect another year of healthy agricultural output, strengthening rural demand, and keeping a check on food prices,” the report states.

In the fiscal year 2025, gross value added (GVA) in the agriculture and allied sector grew 4.6 per cent, outpacing the decadal (fiscal 2015-24) average of 4.0 per cent. Similarly, consumer price inflation (CPI) fell sharply in the March quarter of fiscal 2025 on healthy food supplies that quelled food inflation. The positive tidings on inflation continued in April, when CPI inflation fell further to 3.2 per cent. These positive trends are likely to continue if rains align with the forecast, the report points out.

A healthy temporal and regional distribution of rainfall is essential for balanced agricultural growth. The IMD forecast indicates June is most likely to see above-normal rains for the country as a whole (over 108 per cent of the LPA). That would buck the trend of the previous three seasons, which saw below-normal rains in June, and bodes well for sowing activity and replenishment of water resources, the report states.

The IMD said Central India and South Peninsular India are most likely to see above-normal rains, and Northwest India is normal for the overall monsoon season. Only Northeast India is expected to see below-normal rains.

However, the report also states that adverse climate events, such as excess, deficient, or unseasonal rainfall, heatwaves, cyclones and floods during and after the southwest monsoon season require close monitoring as well. For example, in fiscal 2025, adequate rainfall benefited foodgrain production and inflation, but the more susceptible vegetable output suffered due to weather vagaries. About 41 per cent of the food inflation in fiscal 2025 stemmed from rising vegetable prices driven by adverse weather events such as heatwaves and excess rains in some areas, the report added.

(This report has been published as part of the auto-generated syndicate wire feed. Apart from the headline, no editing has been done in the copy by ABP Live.)