How El Niño could damage India’s economy | Explained

AI Summary

El Niño is predicted to negatively impact India's economy by causing a poor monsoon, which will reduce agricultural output, decrease rural income, and increase food prices leading to inflation. These factors collectively threaten economic stability in the country.

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.