The IMD’s 2026 rainfall forecast of ‘Below normal’ at 92% of LPA, is not only worse than SkyMet’s 94% but also happens to be the most pessimistic initial estimate announced in over two decades.
Download ReportQuantEco Research | India 2026 Monsoon Outlook: Clouds and Cracks
The probability distribution shared by the IMD reflects a rare occurrence - a higher probability attached to ‘Deficiency’ rather than the mean outcome of ‘Below normal’. This perhaps reflects a heavily skewed rainfall probability distribution function this year, owing to the expected arrival of El Niño during the rainfall season.
While a timely onset may support near-normal kharif sowing, the expected emergence of El Niño during the latter half of the season raises risk of a yield shock rather than a sowing shock, with implications for both crop output and reservoir levels. These risks are further amplified by uncertainties around fertilizer availability and rising input costs, partly linked to geopolitical disruptions. The combined effect of lower agricultural output alongside higher input costs, could pose a meaningful upside risk to food inflation, which is not yet fully factored into FY27 CPI estimate (at 4.5%), while also threatening rural incomes and demand, particularly across consumption-sensitive sectors.
We will await IMD's second long range forecast to be released in late May-26, to completely assess and onboard risks of a 'Below normal' monsoon in 2026.