Weak monsoon and elevated oil prices may push inflation higher
Weak monsoon and elevated oil prices may push inflation higher
IN · Published Sep 14, 2026
India's southwest monsoon has been 14% below normal as of 7 September 2026, according to the IMD.
This deficit is expected to persist throughout the month, impacting Kharif crops and potentially contributing to inflationary pressures.

Impact & Risks

The below-normal monsoon is affecting Kharif crop yields, which could lead to higher food prices and inflation. Elevated oil prices add to the risk, potentially increasing transportation and production costs. Farmers and consumers may face economic challenges due to reduced agricultural output and higher commodity prices. The financial sector, however, is expected to benefit from improved liquidity conditions, although NBFCs may experience delayed relief in funding costs.

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