The weaker-than-normal monsoon that is now being forecast by experts for this year threatens to compound the impact of the Middle East conflict on India’s economy. Crop yields could come under pressure at a time when there is already a shortage of fertiliser. And lower hydroelectricity production could further strain power generation. All of this adds to the downside risks to growth and upside risks to inflation. We think the Reserve Bank would worry more about the latter.
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