The Bank of Baroda has expressed concerns about a potential worsening of inflation in the coming months in light of the unpredictable rainfall patterns in the country. Their report highlights that the cumulative rainfall across the nation has fallen into a deficient category, registering 11% below the long-term average.
Attributing this irregular rainfall to the El Nino phenomenon, characterized by elevated sea surface temperatures, the report notes that it has led to uneven and sporadic rainfall distribution, especially in August. The Bank of Baroda anticipates that these conditions may escalate from moderate to strong, as indicated by the warming trends in the tropical Pacific reflected in Sea Surface Temperature anomalies. Despite some increase in kharif sowing compared to the previous year due to irregular rains and inconsistent rainfall patterns in different regions, this situation is poised to contribute to higher inflation in the coming months. Additionally, the country has witnessed record-breaking electricity demand, reaching 241 GW compared to the previous year’s peak demand of 212 GW.
In summary, the Bank of Baroda’s report underscores concerns about the potential aggravation of inflation in the near future due to the unpredictable and deficient monsoon, exacerbated by the influence of the El Nino phenomenon, as well as increasing electricity demand.
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