IANS | 24 Oct, 2023
Stock markets are one of the key leading indicators –
though not the most
critical one – of an economy, and
though yesterday’s market turmoil was due to an interplay of several factors,
including a mixed earning season so far and fear of regional conflict in the
West Asia and US Fed rate hikes for an extended period, it seems some challenging
times are ahead for the Indian economy, particularly with the El
Nino fears recently rearing its head again.
According to a recent report by the United Nations, the
El Nino weather phenomenon is likely to persist through the first half of 2024,
leading to extreme weather conditions around the world – including likely poor
rainfall in India -- and negative impact on the global economy. This year,
India has escaped the adverse El Nino consequences
to a great extent with the monsoon season ending with more than 94 percent of
Experts point out that disruptions
in weather pattern may have implications on several industries and sectors of our
economy. It is already evident how the agriculture sector was hit by erratic rainfall
pattern this year, leading to sharp rises of
tomatoes, onions and some
other vegetables. Also, it resulted in reduction
in the sown area and erosion in farmers' incomes, leading to lower rural consumption
and rise in overall inflation as well.
quite some time now our exports sector has been seeing a
sequential fall nearly every month due to global headwinds, with value of merchandise
shipments falling 8.7 percent y-o-y for the first half of
2023-24. Now, the El Nino impact may further impact the sector, with demand
falling in key markets like the USA and Europe. So, it seems it is the right
time for further care to be taken for the economy. The government should keep a
close watch on the evolving scenario.
I invite your opinions.