Will El Niño weaken India’s economy?
Impact of El Niño on India's Economy
The article explains how an anticipated weak monsoon—under 94% of normal rainfall for July, following a 40% monsoon deficit in June—could translate into economic stress, especially if a 'super El Niño' develops.
It outlines three main transmission channels: weaker kharif agriculture leading to lower output and reduced agricultural contribution; reduced rural incomes that dampen overall demand; and higher food prices that raise inflation and disrupt growth.
India begins the kharif season with relatively strong foodgrain output in 2024–25, but this advantage could be undermined by rainfall shortfalls.
The economic implications of monsoon variations are crucial for understanding rural income and inflation dynamics.
Related dispatches
