Monsoon performance, on a roll since mid-Jun-25, strengthens further into Jul-25
Download ReportQuantEco Research | INDIA Monsoon Update - Rainfall dividend
Monsoon performance has been on a roll since second half of Jun-25 has strengthened further into Jul-25, with rainfall in first 8 days recording at 29% above normal. Geographically, distribution appears to be largely even, with most agrarian states receiving above normal rainfall cumulatively in the season so far. This is underscored by agri production weighted state-level QRI (QuantEco Rainfall Index) indicating cumulative rainfall at 116% of LPA (as of 8th Jul-25), i.e., a tad higher than area-weighted rainfall measure at 115% of LPA. Reservoir storage too remains upbeat, especially in Southern India where monsoon is lagging LPA by 3%.
Expectations of an above-normal monsoon performance in 2025 by IMD, augurs well for inflation outlook. It cements the downside anticipated in food prices in FY26 further. This along with expectations of range-bound movement in fuel and core inflation, allowed us to lower our average FY26 CPI inflation forecast now to 3.5% - i.e., the lowest in 7 years.