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Right now almost the whole country is troubled by the summer and is waiting for the monsoon showers. Monsoon has been delayed this year. Actually the reason for this delay is El Nino factor. The more disturbing thing is that the effect of this El Nino is not going to be limited only to the weather, but it also hurts the economy. This time, a more worrying situation is emerging regarding India.
India has the biggest impact in Asia
Nomura believes that from El Nino 2023, the economy which can be worst affected in Asia is India. Due to this, not only the wheels of the economy can slow down, but at the same time the impact of inflation can increase. Nomura fears that due to El Nino, India’s economic growth rate may fall by 0.4 percent in the current financial year, while inflationary pressure may increase by 0.3 percent.
The growth rate can remain so low
Nomura fears that India’s economic growth rate may come down to below 6 per cent during the current financial year, which was above 7 per cent during the previous financial year. The GDP growth rate in the current financial year is expected to be 5.9 percent. In the financial year 2022-23, India’s economy had grown at the rate of 7.2 percent.
Inflation will be decided by El Nino
The only thing of relief is that there will not be much trouble on the front of inflation. Nomura economists Aurodeep Nandy and Sonal Verma believe that the impact of inflation may not be much, as India exports more than imports in terms of food items. According to Nomura, inflation may rise by 0.3 per cent in the event of a severe El Nino and may remain at just 0.1 per cent if the effect of El Nino is mild. Inflation is estimated to be below 5 per cent during the current financial year.
effect can be like this
Nomura says that even if the effect of El Nino is mild, India’s economic growth rate may decline by 0.2 percent. This apprehension of Nomura is not wrong either, because agriculture in India still has a major contribution to GDP and this sector is completely dependent on weather. Sowing of Kharif crops has been delayed due to the delay of monsoon and more effect of El Nino is likely to be seen in the next Rabi season.
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