Crisil’s Joshi Says Normal Monsoon Seen Taming Food Inflation

Dharmakirti Joshi, Mumbai-based chief economist at credit rating company CRISIL Ltd. (CRISIL), the Indian unit of Standard & Poor’s, comments on the impact of a normal monsoon on inflation, economic growth and interest rates.

Monsoon rainfall in India, the main source of irrigation for the country’s 235 million farmers, will be normal this year, the India Meteorological Department said in a statement in New Delhi today. Rains will be 99 percent of the 50-year average of 89 centimeters in the June-September season, it said.

Joshi spoke in a phone interview from Mumbai.

“This is the first estimate and has to be taken with a pinch of salt. Anyway, this is good news for inflation, particularly from the food inflation point of view. If the normal monsoon materializes, this will definitely help in taming food inflation.

‘‘This is a good sentiment booster. This is a first cut good news for the economy because monsoon always remains a risk for India from the inflation perspective.

‘‘Interest rates will depend on many other factors. Not monsoon alone. This is one positive factor from the interest rate perspective. Unless the overall inflation comes under control, I think that further easing will be restricted.’’

To contact the reporter on this story: Swansy Afonso in Mumbai at safonso2@bloomberg.net

To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net