India keeps forecast for normal monsoon, easing inflation fears

India maintained its forecast for a normal monsoon this year, tempering concerns about weather risks to inflation. Rainfall during the June-September season may reach 96% of a long-term average, according to the India Meteorological Department. This matches with a previous forecast in April. 

The monsoon is inextricably linked to India’s economy. It waters half of the country’s farmlands, and has the power to determine prices of food staples and the livelihoods of hundreds of millions of farmers. While inflation has slowed to an 18-month low, analysts have been concerned that adverse weather could drive up risks again. 

India defines average, or normal, rainfall as between 96% and 104% of the long-term average. The forecast has a margin of error of 4%. Private forecaster Skymet has predicted a below-normal monsoon, saying rains may reach only 94% of average levels.