The Reserve Bank of India's (RBI) 'State of the Economy' article, published in the RBI monthly bulletin and authored by RBI researchers, has cautioned that an adverse south-west monsoon (SWM), if it materialises, could weigh on the domestic growth and inflation outlook. As per the India Meteorological Department's (IMD) updated forecast released on May 29, 2026, SWM rainfall is likely to be below normal this year. The monsoon arrived over Kerala on June 4, three days later than the normal onset date of June 1, and cumulative rainfall during June 1-21 at the country level has been significantly lower than normal. The reservoir position has slipped below last year but remains above the decadal average. The article noted that public stocks of rice and wheat with the Food Corporation of India (FCI) are well above buffer norms, serving as a strategic cushion against any supply disruption or price spike, including from a likely El Niño. In its meeting on June 5, the Monetary Policy Committee lowered the growth projection from 6.9% to 6.6% and raised the inflation forecast from 4.6% to 5.1%, citing elevated oil prices, global trade uncertainty, adverse weather and geopolitical tensions. Despite this, the Indian economy grew 7.8% in Q4 2025-26, supported by private consumption and fixed investment. High-frequency May indicators showed resilience, with double-digit growth in e-way bills and electricity demand. The article also warned that any breakdown of the interim US-Iran peace agreement could reignite inflationary and energy-security risks. The views expressed are those of the authors and do not represent the RBI's views.