NEW DELHI: The forecast of a normal monsoon this year by Indian Meteorological Department (IMD) will bring cheer to consumption-driven sectors, such as fast-moving consumer goods, say experts.
In its first-stage forecast for the south-west monsoon, the IMD on Monday predicted that the monsoon will be “near-normal” this year. According to the Met department, the rainfall is likely to be 96 per cent of the long-period average (LPA) as against 91 per cent actual rainfall last year.
“This prediction is set to boost market sentiments, lifting worries over the possibility of below-normal rainfall that Skymet had earlier predicted,” said Jagannadham Thunugutla, senior vice-president and head of research (Wealth) at Centrum Broking Limited. Earlier, Skymet, a private weather forecaster, had predicted a ‘below normal’ monsoon season, pegging rainfall activity at ~93 per cent of the LPA, citing El Nino risks.
LPA is the average of rainfall between 1951 and 2000, which is 89 cm. When the forecast is between 96 per cent and 104 per cent of the LPA, the monsoon is considered normal, while rains between 90-95 per cent of LPA are classified as “below normal”.
The department also sees the rainfall ‘well distributed’, which should bring some cheer to farmers in the coming Kharif season. Besides, a normal monsoon is generally a positive for sectors that gain when the rural economy is in good health. “Rural areas often make up majorly for falling sales in metropolitan cities. A normal monsoon would mean a positive consumption outlook lifting up growth rates for sectors such as consumer goods, auto companies, etc,” said Rajat Wahi, partner, Deloitte India. However, details of spatial and temporal distribution of rainfall, which are more pertinent today, will be available only in the second-stage forecast in June 2019.