Above-normal May rainfalls may cushion India's growth outlook as global risks mount
The India Meteorological Department (IMD) on Friday forecast above-normal rainfall in May and a timely arrival of the southwest monsoon over the Andaman and Nicobar Islands—developments that could lift rural demand, support farm output and add momentum to economic growth."Our forecasting system show that conditions for the arrival of the south-west monsoon are becoming favourable between May 15 and 20," said Mrutyunjay Mohapatra, director general, IMD, while adding that the country is likely to receive above-normal rains in May.The weather forecaster is likely to announce the onset date for monsoon in the second week of May.Rainfall cushionA favourable start to the monsoon cycle is critical for India’s economy, where agriculture accounts for 15-16% of GDP and supports nearly 46% of the population. Strong rainfall typically boosts farm incomes, lifts rural consumption, and helps ease food inflation, improving overall purchasing power.Economists estimate that a good monsoon could add 20–40 basis points to India’s GDP growth, currently projected at 6.5–6.8% for FY27, according to the Reserve Bank of India and multilateral agencies such as the International Monetary Fund.These projections have come under pressure amid the fallout of the West Asia conflict, which has disrupted energy and food markets and raised the risk of higher inflation and slower consumption.Retail inflation edged up to 3.4% in March from 3.21% in February, reflecting a rise in food and energy prices following the West Asia conflict. While the reading remains below the Reserve Bank of India’s medium-term target of 4%, the uptick suggests emerging price pressures.The IMD’s May outlook reinforces expectations of an early boost to the kharif sowing season. With rainfall projected at over 110% of the long period average (LPA) of 61.4 mm, soil moisture levels are likely to improve, enabling timely land preparation and early sowing of crops such as paddy, pulses and oilseeds, particularly in rain-fed regions."The rainfall during May, 2026 averaged over the country as a whole is most likely to be above normal (>110% of LPA)," said Mohapatra. The LPA of rainfall over the country as a whole during May based on data of 1971-2020 is about 61.4 mm. Last year, May receive 106% of the normal rainfall."Good rainfall in May would definitely boosts Kharif sowing by ensuring adequate soil moisture and early filling of reservoirs. We expect higher area coverage for pulses and oilseeds and lowering irrigation costs for farmers and lessen reliance on groundwater for initial land preparation," Dr Kalyan Goswami, director general, Agrochem Federation of India, a lobby group for the agrochemical industry.Demand outlookRural demand, which has lagged urban consumption in recent quarters, is expected to recover on the back of a favourable monsoon. It is projected to grow 6-7% in FY27, up from about 3-4% last year, based on estimates by brokerages such as ICICI Securities and Nuvama Institutional Equities in April. In good monsoon years, sectors such as two-wheelers, tractors and fast-moving consumer goods typically see a 10-12% volume uptick, according to industry reports and past trend analyses by the Society of Indian Automobile Manufacturers.Urban demand, meanwhile, remains relatively resilient, expanding at 7-8%, supported by steady salaried income growth and services sector momentum, according to estimates by the Reserve Bank of India in April. Together, private consumption, accounting for nearly 58–60% of GDP, is expected to strengthen, as per national accounts data from the Ministry of Statistics and Programme Implementation for Q3FY26.Even so, the broader monsoon outlook remains less certain.On 13 April, IMD projected that the southwest monsoon could be below normal this year at around 92% of the long-perio
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