Forecast for a below-normal monsoon added risk to economy

 A below-normal monsoon, which irrigates more than half of Indias farmlands, is an added risk to the economy, raising concerns regarding food production and the ability of the rural economy to prosper, according to a report by Motilal Oswal Financial Services.

Skymet expects the upcoming monsoon to be 94 per cent (with an error margin of +/-5 per cent) of the long period average of 868.6 mm for the four-month period from June to September this year amid the El Nino threat.

The report mentions that the likelihood of El Nino is increasing and that the probability of it becoming the dominant category during the 2023 monsoon is increasing too.

Geographically, northern and central parts of the country are expected to face rain deficit.

Gujarat, Madhya Pradesh and Maharashtra are expected to witness inadequate rain during July and August, while Punjab, Haryana, Rajasthan and Uttar Pradesh are likely to observe less than normal rain during the second half of the season.

An analysis of Skymet's rainfall predictions in April month of the year does not inspire confidence, Motilal Oswal Financial Services said.

The actual rainfall during the past five years has been either much higher or lower compared to the Skymet first predictions.

The difference ranged from a shortfall of 9.4 per cent in 2018 to an excess of 18.2 per cent in 2019. On an average, thus, the actual rainfall has been 4.6 per cent higher than Skymet's April projections.

The India Meteorological Department (IMD) has not yet released its monsoon forecast but is likely to do it soon (it was announced on 14th April last year).

Nevertheless, the IMD has forecast above-normal temperatures this summer.