New Delhi: Deficient monsoon has prompted
financial major Citigroup India to revise its growth forecast
for the country from 6.8 per cent to 5.2 per cent.
"Our base case GDP of 6.8 per cent in FY`10 could
moderate to 5.8 per cent or in a worse case to 5.2 per cent
levels depending on the extent of damage," Citi economist
Anushka Shah said in a report.
Given that rainfall has a high correlation with
agriculture (0.64) and private consumption (0.55), a poor
monsoon or a drought (classified as rainfall deficiency of
more than 25 per cent) would impact headline GDP, Shah said.
After four consecutive years of a good monsoon and robust
agricultural growth, rainfall in 2009 began on a weak note,
with 48 per cent deficiency in June - the driest in over 15
While trends in July have improved, on a cumulative
basis monsoon is still in the red (minus 27 per cent), she
The situation is further exacerbated by low reservoir
levels and water tables, decrease in summer crop sowing (down
8.5 per cent), and a growing El Niño threat, which could mean
pre-mature monsoon withdrawal, she added.