ADB raises India's growth forecast to 7%, but El Niño threatens farm output

The Asian Development Bank has raised its growth forecast for India's economy to 7%, joining other major rating agencies in acknowledging the nation's economic resilience. However, the strengthening El Niño weather pattern poses significant risks to agricultural productivity and could push inflation higher.

Retail inflation has already breached the Reserve Bank of India's target, straining household budgets. The RBI may need to maintain a restrictive monetary policy stance to combat external shocks and inflationary pressures stemming from potential crop failures and supply disruptions caused by the weather phenomenon.