Floods, heavy rains are unlike

Large areas of Indian agricultural lands have been affected by floods and heavy rains, as the main agricultural wilaya of Punjab faces its worst floods in 40 years.

Although crops have been damaged, analysts expect that the total impact on inflation for the 2026 fiscal year will not be severe enough to push it beyond the mid -mid -point goal of 4 % – the target scope of consumer enlargement at the Reserve Bank in India ranges from 2 % to 6 %

HSBC said in a report on Monday that the limited impact is expected to preserve the production of grains and adequate stocks

Breaking the declining direction for nine months, consumer enlargement in August decreased to 2.1 %, from 1.5 % in July due to high food prices compared to the previous month, led by vegetables, eating oil, eggs, meat and fruits.

Bank of America said in a report on Friday that the overall effect of continuous rains is limited to inflation due to the high base, but it may be greater if the rain continues in the harvest season.

Analysts, including in BOFA, expect that it will reduce the tax and services tax, which will enter into force as of September 22, to keep inflation less.

It is said3 acres of agricultural lands were damaged and according to the Punjab State government, half a million people were affected by 23 provinces of floods.

Other states affected by heavy rains include Hemachal Pradesh, Jamo and Kashmir in the north of the country and Teleiangana in the south.

“Excess rain in August via Punjab, Rajastan and Tilanga” is a source of anxiety for crops in the advanced growth stages. “

Good inflation allowed so far to reduce the Central Bank Chamber in India, which sparked local growth at a time when the country faces commercial concerns due to a 50 % sharp tariff on its exports.

On Sunday, and The Indian Meteorological Department He said that the circumstances are favorable to withdraw the monsoon winds from parts of Punjab and other states during the next three days.

But IMD is expected to see that northeastern India and parts of Maharashtra, another important mandate for agricultural products, are expected to see heavy rains until Wednesday.

“The excess rainfall in certain parts of the country (especially Punjab) has caused some fears of inflationary pressures in the near term, but the daily data in India about food does not indicate any significant impact so far for the month of September,” City Research said.

CITI reduced the average CPI’s main forecasts for India for the fiscal year ending in March 2026 to 2.9 % from 3.2 % previously.

“India is witnessing a significant decrease in inflation,” City said.

With inflation will remain silent and the government focuses on leading growth to alleviate the impact of American definitions, the analyst expects a way to further mitigate monetary policy.

HSBC said: “We believe that RBI will reduce prices again in the fourth quarter of 2015, as the rate of ribo rose to 5.25 %,” HSBC said.