El-Nino, below normal monsoon pose risk for growth, inflation outlook in FY27: HDFC Bank MD

“Risks from global trade fragmentation, geo-political tensions and external financial market volatility warrant continued vigilance and prudent risk management across the sector,” said Sashidhar Jagdishan

Source

The Hindu — Business →

Quick Revision

Prelims-testable facts

01El Niño is a complex weather phenomenon that occurs when the surface temperature of the Pacific Ocean warms up more than usual.
02Below-normal monsoon rainfall in India can lead to reduced agricultural output and impact rural demand.
03HDFC Bank's MD, Sashidhar Jagdishan, has warned of El Niño and geopolitical tensions impacting India's growth and inflation outlook for FY27.
04India's economic outlook for FY27 faces serious threats from El Niño and below-normal monsoon conditions.
05El Niño can lead to renewed inflationary pressures in India due to reduced agricultural output and increased food prices.
06The expected impact of El Niño on India's economy includes a slowdown in rural demand and potential inflation above 5% in FY27.

Trap alerts

Most people think El Niño only affects the Pacific region, but actually it has global implications for weather patterns and economies.
Most people think below-normal monsoon rainfall is rare in India, but actually it occurs about once every three years on average.

Prelims Practice MCQs

Single facteasy

What is the fiscal year mentioned in the article as a risk for growth and inflation?

A.FY26
B.FY27
C.FY28
D.FY29

The fiscal year FY27 is mentioned as a risk for growth and inflation due to El-Nino and below normal monsoon.

Multiple statementsmedium

Consider the following statements regarding El-Nino and its impact on Indian economy: 1. The El-Nino phenomenon is expected to have a significant impact on India's monsoon in FY27. 2. Global trade fragmentation is a major concern for the Indian economy due to rising geo-political tensions. 3. External financial market volatility will lead to a decline in inflation rate in India. How many of the above statements are correct?

A.Only one
B.Only two
C.All three
D.None

The source mentions that El-Nino and below normal monsoon pose risks for growth and inflation outlook in FY27. It also highlights the concerns of global trade fragmentation and geo-political tensions, but does not support the claim about external financial market volatility leading to a decline in inflation rate.

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