India's Meteorological Department has flagged a potential El Niño risk for the 2026 monsoon season, projecting rainfall at 92% of the long-period average, a threshold that places the season in the "below normal" category. The forecast signals a meaningful deterioration from more favorable recent monsoon cycles, with IMD noting that weak La Niña conditions are transitioning toward El Niño. El Niño episodes typically suppress Indian Ocean moisture circulation, reducing rainfall across key agricultural belts in central and peninsular India. A 92% rainfall projection carries direct consequences for kharif crop output, primarily rice, pulses, and oilseeds, which are sown during the June-September monsoon window and account for a substantial share of India's annual food grain production. Below-normal rainfall raises input cost pressures for farmers, strains rural demand, and can push food inflation higher, complicating the Reserve Bank of India's monetary policy calculus. Commodity traders, agricultural lenders, and FMCG companies with rural exposure will be tracking whether the El Niño signal strengthens or moderates as the season approaches.
Pakistan's economy grew 3.7 percent in FY2026, its fastest rate in four years, according to the Pakistan Economic Survey presented by Finance Minister Muhammad Aurangzeb. Growth beat last year's 3.18 percent but missed the 4.2 percent target, with floods, regional conflict, and weaker food exports cited as key drags.
The Union government released an additional Rs 1,09,019 crore in tax devolution to states on August 1, 2026, separate from the regular monthly transfer. The lump-sum release aims to accelerate state capital spending in the July-September quarter, with Uttar Pradesh, Bihar, and Madhya Pradesh among the top recipients.
US mortgage rates have risen to a one-year high as markets weigh Federal Reserve rate uncertainty and Middle East conflict-driven inflation fears. Higher rates increase monthly payments for new buyers and are likely to further suppress housing market activity and refinancing.
Pakistan's Sensitive Price Index rose 13.52 percent year on year for the week ending July 2, 2026, marking 45 consecutive weeks of annual gains. Electricity up 49 percent, wheat flour up 68 percent, and LPG up 44 percent year on year are the main drivers.
