Forecasters warn a strong El Nino is likely in the second half of 2026, bringing hotter, drier conditions across Asia. The outlook raises risks for crops and food supplies, as farmers may struggle with fertilizer shortages and high fuel costs. India is bracing for below-average monsoon rains, Southeast Asia could see weaker palm oil and rice output, and China faces a higher flood risk.
RBI’s Monetary Policy Committee said a longer West Asia conflict could meaningfully affect India’s growth and inflation, even as the economy stays resilient. Instead of changing policy, it chose a wait-and-watch approach, citing heightened geopolitical uncertainty and a possible El Nino-driven inflation risk.
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Forecasters warn a strong El Nino may form in late 2026, shifting weather patterns worldwide. Much of Asia could see hotter, drier conditions, with India’s monsoon potentially running below average and Australia’s key eastern farming areas facing reduced rainfall. Meanwhile, parts of North and South America may get wetter weather, even as the climate event remains natural.
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