IMD's monsoon forecast: Wide off the mark

Stock investors have been fretting over the recent downgrade in this year’s monsoon forecasts by the Met department as lower rainfall reduces farm products output and could fuel inflation.

But, a recent study by Kotak Institutional Equities on the track record of the Met department in forecasting the rainfall may assuage investors.

IMD's forecasts have seen "significant" deviations in 12 out of the 16 years since 1994, the study said. "One would expect that such large dependency on monsoon will mean that over the past six decades, India would have perfected the art of forecasting monsoon," the note said.

"This lack of ability to predict weather has meant that the weather insurance market has also not picked up, leaving farmers completely at the mercy of the elements," it added.