Deficient monsoon rains till early this month may hit inflation more than it hits economic growth in the current financial year, Citigroup has said in a report.
Given the limited irrigation facilities in the country, the monsoon season, which runs through June-September, largely determines the outcome of the kharif crop. The lull in the early July rains is disconcerting. But the presence of mitigating factors and ongoing structural changes in the farming sector are comforting, Citi said in its 'India Macro View' released today.
Citigroup said a sub-par monsoon could shave off 50 basis points from GDP growth to leave it at 7.6 per cent for the current financial year.
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