India’s Southwest monsoon witnessed a stellar rebound in Aug-24. Rains in Aug-24 clocked 15.8% above LPA, pushing the season’s cumulative rainfall to a surplus of 7% as of end Aug-24 compared to 2% as of end Jul-24.
Download ReportQuantEco Research || India Monsoon Update Aug-24: Grey skies and comfort sighs!
The rainfall was also better distributed in Aug-24, compared to first half of the season. All geographical regions received higher than normal rains in the month, led by Northwest which saw rains 32.3% above normal. Bountiful rains in Aug-24 have helped water level in major reservoirs to replenish to comfortable levels. A bountiful monsoon in Sep-24 coupled with replenishment of reservoirs, augurs well for the Rabi season – especially to boost acreage under wheat. We can expect softening in food inflation to continue into Q3 FY25 onwards, as Kharif output comes on board and expectation of above normal rains in Sep-24 set the stage favorably for Rabi sowing. As such, we continue to hold on to our FY25 CPI inflation forecast of 4.5% compared to 5.4% in FY24, riding on the comfort of core and fuel inflation.