El Nino, global uncertainty pose risks to food inflation: Finance Ministry report

01 Sep 2026 Evaluate

The Finance Ministry, in its Monthly Economic Review (MER), has said that an intensifying El Nino, which is expected to peak in late 2026, warrants a cautious outlook on domestic food inflation and agricultural output, including the upcoming rabi crops, particularly wheat and mustard. The ministry flagged the external environment as the key source of uncertainty and said that, going forward, there is a need to closely track three global developments: the sovereign bond market worldwide; the potential rise in the global average inflation rate due to higher prices of electronic goods and food items; and investment capital flows from across the world, including developed nations.

It said the domestic economy retained its vigour during August. Domestic demand remained strong, while the external sector remained stable. However, food prices, weather conditions and global uncertainties will need to be closely monitored in the coming months. It added that the global economy remains uncertain due to variations in growth, oil prices and interest-rate policies. Despite these external risks, India's economic activity, inflation and external position have remained relatively stable. Domestic economic activity remains steady, with resilient domestic demand providing support amid some moderation in the pace of expansion. As per data released on August 31, the Indian economy grew 7.8 per cent in the April-June quarter, higher than the RBI's 7 per cent projection.

Going forward, it said easing cost pressures and firm demand conditions are expected to support economic activity, although the external environment remains a key source of uncertainty. The emergence and persistence of El Nino conditions, with El Nino assessed as the dominant phase through March 2027, warrant close monitoring given their implications for rainfall, crop outcomes and food inflation. Kharif sowing has gained momentum following the intensification of monsoon rains across large parts of the country, although acreage remains below last year's level.

With regard to the external market, the report said the external sector remains well-positioned to absorb pressures arising from changing global trade dynamics and volatile global financial conditions. While the current account deficit widened marginally in Q1 FY27, the subsequent recovery in capital flows, a resilient services surplus and comfortable foreign exchange reserves provide important buffers against external developments. India's continued engagement through BRICS, including initiatives to expand intra-BRICS trade, strengthen MSME participation in international markets and build resilient global value chains, is expected to support export diversification and market access. It added that, taken together, these developments provide a supportive foundation for maintaining external sector stability, even as global uncertainties persist.

Create stable, long-term investment portfolio with strong, consistent stocks.

Start Research-backed Investing ...Now. Subscribe to Sapphire

Address : The Alchemists Ark Pvt. Ltd., B-101, Signet Corner Building, Balewadi Phata, Baner, Pune, Maharashtra 411045

About MoneyWorks4Me

MoneyWorks4Me is a SEBI-registered Investment Adviser (IA) dedicated to helping investors build long-term wealth through transparent, research-driven, conflict-free guidance. Founded in 2008, we started our journey as a Research Analyst (RA), providing deep fundamental analysis, intrinsic value insights, and long-term investing frameworks for Indian equities. In 2017, we transitioned to a full-fledged SEBI-registered Investment Adviser, strengthening our commitment to acting as a fiduciary—always putting the investor’s interest first.

Our Vision

To become India’s most trusted, research-powered fiduciary advisory platform—where every investor, regardless of experience, can make calm, confident, and well-reasoned investment decisions.

What Makes MoneyWorks4Me Different

Fiduciary-first advisory model.
As SEBI-registered IAs, we are legally and ethically bound to act in the best interests of our clients. We do not sell or distribute any financial products. This ensures our guidance is 100% unbiased and conflict-free.
Deep fundamental research + robust valuation discipline.
Built on more than 15 years of equity research, our framework combines quality assessment, intrinsic value estimation, and a sensible margin-of-safety approach.
Process—not predictions.
We don’t rely on guesswork or market timing. Instead, we focus on asset allocation, risk management, and long-term compounding.
Technology + Human Intelligence.
We believe a combination of both is essential for investing success. We constantly innovate and upgrade in-house tools, financial X-rays, and portfolio analytics so that our team of analysts and advisors are equipped with the best.
Partner with Clients.
We follow a DIWM (Do-It-With-Me) approach where we partner clients in setting goals, financial planning, educating on our investing process and share decision-enabling resources transparently with our clients who retain control on execution.

Our Approach: Ensuring compounding work its magic on client portfolio.

MoneyWorks4Me ensures this through:

Investing in stocks, mutual funds, debt, and gold
Quality-at-Reasonable-Price way of investing in stocks
Constructing Direct Stock Portfolios with Core, Booster, and Amplifier stocks
A Mutual Fund Portfolio that delivers consistent out-performance and meaningful diversification (low overlap)
Periodic review and rebalancing
Clear Buy-Sell-Hold, and Position-sizing frameworks

Name of the IA registered with SEBI:	The Alchemists Ark Pvt. Ltd.
Logo:
Trade/Brand Name of IA:	MoneyWorks4Me Investment Advisers
Brand Logo:
SEBI Registration Number:	INA000013323 Validity – May 16, 2019 – Perpetual
Registration:	Non-Individual
BSE Enlistment No:	1187
Address:	B-101, Signet Corner Building, Balewadi Phata, Baner, Pune, Maharashtra 411045

Compliance Officer Details:	Name: Shrikant Jagtap Email: shrikant.jagtap@moneyworks4me.com	Telephone: +919860359463 Address: Same as IA
Grievance Officer Details:	Name: Mukta Vaze Email: mukta.vaze@moneyworks4me.com	Telephone: +919860919463 Address: Same as IA
Principal Officer Details:	Name: Atharva Bhide Email: atharva.bhide@moneyworks4me.com	Telephone: +919175899463 Address: Same as IA
Standard Warning:	Investment in securities market are subject to market risks. Read all the related documents carefully before investing.
Disclaimer:	Registration granted by SEBI, enlistment with exchange and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.