05 AUG,2019 | MEDC
A strong surge in rainfall in the last week of July (42% above normal), enabled this year’s monsoon deficit to contract to 9% at the end of the month. This is good news for the economy as almost half of India’s farmland depends entirely on rainfall for its water supply. The monsoon pattern has a strong bearing on rural demand for FMCGs, gold, vehicles, and agricultural implements. This has direct implications for industrial growth in the country. India’s economy, in particular, continues to depend on the monsoon more than that of any other country of a comparable size and population. Our core sector growth has already slumped to its lowest level in more than four years in June, reflecting an economic slowdown and a lack of pickup in investment. An adequate monsoon could aid in reversing the narrative of weak demand, and enable macroeconomic fundamentals to improve to comfort levels.
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