How El Niño could damage India’s economy | Explained

AI Summary

El Niño is expected to severely impact India's economy by affecting agricultural output, reducing rural income, and increasing food prices which could drive inflation. The economic downturn is closely tied to a poor monsoon season impacting key sectors.

A poor monsoon can damage the economy in three ways: it affects agricultural output, reducing the sector’s contribution to the economy; it hits rural income, denting aggregate demand; and it threatens to push up food prices, causing inflation.