India’s Southwest monsoon recorded rainfall at 6% above LPA in Aug-25
Download ReportQuantEco Research | India Monsoon Update - Bountiful, but skewed
Rainfall activity which had seen a prolonged phase of weakness in early days of August, made a strong comeback in the last 10 days owing to formation of several low-pressure systems. Rainfall distribution remained skewed, with Northwest receiving 27% surplus rainfall vs. LPA, while E&NE reeled under a deficit of 18% vs. LPA. Of the key agriculture states, most have received adequate rainfall so far in the season. This coupled with comfortable reservoir levels has led to steady progress of area sown under Kharif crops, recording an increase of 3.7% on an annualized basis. As per the IMD, rainfall during Sep-25 is most likely to be Above normal i.e., at 109% of LPA or higher. Late withdrawal of monsoon will help to keep soil moisture levels intact, supporting Rabi sowing later in the year. With food price pressures expected to remain comfortable until the end of 2025 and crude prices remaining benign, we continue to hold on to our FY26 CPI inflation forecast of 3.0%. Amidst a comforting inflation outlook and a higher-than-expected Q1 FY26 GDP growth outcome (at 7.8% vs. market expectations pegged at 6.9%) which is likely to act as a buffer against impending tariff induced downside risks to growth beginning Q2 FY26, we believe the chance of a final 25 bps rate cut in Oct-25 to have eased marginally