The India Meteorological Department projected seasonal rainfall at 92% of the long-period average (LPA), below its benchmark range for normal precipitation. The monsoon, which typically spans June to September, provides nearly 70% of the country’s annual rainfall and is critical for farming and water supplies.

M. Ravichandran, secretary in the Ministry of Earth Sciences, said the forecast reflects evolving climate conditions, while IMD Director-General Mrutyunjay Mohapatra noted that weak La Niña-like conditions are transitioning to neutral patterns, with a high likelihood of an El Nino developing after June.

El Niño events are typically associated with hotter and drier weather across South and Southeast Asia and have historically coincided with weaker monsoons in India, sometimes triggering drought conditions and crop losses.

However, Mohapatra said a potential positive phase of the Indian Ocean Dipole later in the season could partially offset rainfall deficits by strengthening precipitation in the latter half of the monsoon.The initial forecast of 92% of the LPA is the lowest in nearly three decades, with an updated outlook expected in late May.

Economists warned that weaker rainfall, combined with global energy and commodity disruptions linked to the Middle East conflict, could weigh on India’s economic outlook. Aditi Nayar said the developments pose downside risks to GDP growth for the 2026–27 fiscal year and could push inflation above 4.5%, compared with 3.4% recorded in March.

The government has projected economic growth between 6.8% and 7.2% for the current fiscal year, but agricultural performance remains a key variable.Lower rainfall could also reshape trade flows.

India, the world’s largest exporter of rice and onions and a major sugar producer, may curb exports if crop yields fall. At the same time, reduced domestic oilseed output could increase reliance on imported edible oils from countries such as Indonesia, Malaysia, Argentina and Brazil.

The monsoon outlook is closely watched by policymakers and markets alike, given its broad impact on rural incomes, food prices and overall economic stability.

In an interview, Banga said the World Bank expects global growth to decline by 0.3 to 0.4 percentage points under a baseline scenario assuming an early end to the conflict, and by as much as 1 percentage point if the war continues.

Inflation could rise by 200 to 300 basis points, with further increases of up to 0.9 percentage point in a prolonged conflict scenario.The bank now projects growth in emerging markets and developing economies at 3.65 percent in 2026, down from a previous estimate of 4 percent in October.

In a more severe scenario, growth could fall to as low as 2.6 percent. Inflation in these economies is forecast to reach 4.9 percent, compared to an earlier estimate of 3 percent, and could climb as high as 6.7 percent if disruptions persist.

The conflict has already driven oil prices up by about 50 percent while disrupting supplies of key commodities including oil, natural gas, fertilizers and helium, alongside impacts on tourism and air travel. Continued instability around the Strait of Hormuz remains a major risk factor, given its role in global energy flows.

Banga said the economic outlook depends heavily on whether ongoing negotiations lead to a lasting peace and the reopening of critical trade routes. Failure to stabilize the situation could result in longer-term damage to energy infrastructure and sustained pressure on global markets.

The World Bank has begun discussions with vulnerable countries, including small island states with limited energy resources, on accessing emergency funding through its crisis response mechanisms. These facilities allow governments to draw on pre-approved funds to manage immediate shocks without requiring new approvals.

At the same time, Banga cautioned governments against introducing unsustainable energy subsidies, warning such measures could worsen fiscal pressures in countries already burdened by high debt and elevated borrowing costs.

The crisis has intensified calls for energy diversification and greater self-sufficiency. Banga pointed to increased investments in refining capacity in countries such as Nigeria as an example of improving energy resilience, while noting ongoing World Bank support for expanding energy production in nations including Mozambique.

He added that scaling up nuclear, hydroelectric, geothermal, wind and solar energy would be critical to reducing reliance on traditional fuels and mitigating future shocks to global energy systems.

Managing Director Kristalina Georgieva said the war had caused the most severe disruption to global energy supply on record, with millions of barrels of oil production shut down due to Iran’s effective closure of the Strait of Hormuz.

“Instead, all roads now lead to higher prices and slower growth,” Georgieva told Reuters, adding that the IMF would cut its growth forecasts and raise inflation projections in its upcoming World Economic Outlook.

The conflict is expected to dominate discussions at next week’s IMF and World Bank spring meetings in Washington, where policymakers will assess the economic fallout from the crisis.

The Fund had previously anticipated a modest upgrade to global growth projections before the escalation.Georgieva said global oil supply had fallen by about 13%, with knock-on effects extending beyond energy markets into supply chains for commodities such as fertilizers and helium.

Brent crude prices have risen to around $110 per barrel, reflecting tightening supply conditions.She warned that even a swift resolution would leave a lasting economic impact, while a prolonged conflict would deepen inflationary pressures and further dampen growth prospects.

The effects are expected to be uneven, with energy-importing countries facing the greatest strain. Many low-income economies lack the fiscal capacity to cushion rising costs, increasing risks of economic instability and social unrest.

Georgieva said some countries had already sought financial assistance from the IMF, which could expand existing lending programs to address urgent needs. She cautioned against broad energy subsidies, arguing they could exacerbate inflation.Energy exporters have also been affected.

Damage to production infrastructure has slowed output recovery in some countries, including Qatar, where restoration of natural gas capacity could take several years.The IMF is coordinating with other global institutions, including the International Energy Agency and the World Bank, to assess the broader implications of the conflict.

Georgieva also highlighted risks to food security, noting that disruptions to fertilizer supplies could trigger wider shortages if the conflict continues.

The World Food Programme has warned that millions could face acute hunger if conditions worsen.

The scheme would provide government-backed guarantees to banks for lending over a four-year period, mirroring measures introduced during the COVID-19 pandemic to sustain credit flow to stressed sectors.

The guarantees are expected to cover up to 90% of loans of up to 1 billion rupees ($10.75 million), the sources said.The fiscal cost of the plan is estimated at 170 billion to 180 billion rupees ($1.83 billion to $1.94 billion), according to the sources, who declined to be identified as discussions are ongoing.

Indian businesses, including textile and glass manufacturers, have been affected by supply disruptions linked to the war involving Iran, while rising energy prices have added to cost pressures.

As the world’s third-largest oil importer, India remains particularly exposed to volatility stemming from the closure of the Strait of Hormuz, a key route for global energy shipments.The government is also grappling with broader macroeconomic risks, including the prospect of higher inflation and slower growth as fuel costs rise and supply chains tighten.

The proposed guarantees are intended to encourage banks to continue lending despite heightened risks, ensuring businesses can meet obligations and sustain operations during the crisis.

India deployed a similar credit guarantee programme in 2020 to support sectors such as travel and tourism during the pandemic, helping firms resume operations and manage debt burdens.

Under a month-long order introduced last week, shops must close by 9:00 p.m. on weekdays and 10:00 p.m. on weekends, with a temporary extension to 11:00 p.m. during the Coptic Easter period. Authorities say the meaaures are necessary as rising global fuel prices drive up Egypt’s energy import bill.

Prime Minister Moustafa Madbouly said the country’s monthly energy costs more than doubled between January and March to $2.5 billion, reflecting Egypt’s dependence on imported fuel to meet domestic demand.

The restrictions have sharply altered life in Cairo, a city known for its late-night economy. Streets that typically remain active into the early hours now empty soon after closing time, with police patrols enforcing compliance.Small businesses have been among the hardest hit.

Shopworker Ali Haggag said his clothing store has lost more than half its revenue since the measures took effect, as evening foot traffic a major source of sales —has been curtailed.Economists warn the impact could be widespread in Egypt’s informal sector, which accounts for roughly two-thirds of employment.

Wael el-Nahas said reduced operating hours translate directly into lower incomes for millions of workers dependent on nightly commerce.The crisis has also affected major industries. Cinema operators report steep losses as late-night screenings typically the most profitable have been eliminated.

Film producer Gaby Khoury said box office revenues have fallen by more than 60 percent, prompting delays in releases and production schedules.Tourism, a key source of foreign currency, faces similar pressures.

While high-end hotels and Nile-side venues are exempt, popular attractions in central Cairo, including markets and bazaars, must close early, limiting visitor spending.

Industry officials say the reduction of evening activity risks diminishing the city’s appeal to tourists.The curbs come alongside broader austerity measures introduced in recent weeks, including fuel price increases, reduced public lighting, and expanded remote work policies.

Authorities say the steps are needed to manage fiscal pressures as energy prices surge following the escalation of conflict involving Iran.The economic strain has coincided with currency depreciation and rising inflation.

The Egyptian pound has weakened by around 15 percent since the conflict began, while inflation reached 13.6 percent in March.

Despite the disruption, some businesses are adapting by reduction staffing hours or employing informal workarounds to continue operations. Others expressed cautious optimism that consumers will adjust to the new schedule.

Surging global fuel prices are placing mounting pressure on households and small businesses across continents, with workers and entrepreneurs reporting rising costs, shrinking incomes and difficult trade-offs in daily life.

On a small dairy farm north of Auckland in New Zealand, a farmer managing 200 cows said higher diesel and petrol costs are eroding already tight margins. The farm consumes around 900 litres of diesel and up to 300 litres of petrol each month to operate tractors, machinery and quad bikes. Recent price increases have added more than NZ$1,200 to monthly expenses, translating to over NZ$15,000 annually.

The farmer said the burden extends beyond direct fuel use. Contractors charge more for their services and fertiliser prices have risen by about 40%, compounding operational costs. With commodity prices largely dictated by markets, the farmer said there is little scope to pass on higher costs, forcing decisions to delay maintenance and investment.

In Port Vila, bus driver Daniel Thomas described similar pressures in the transport sector. Driving from early morning until late evening, he earns about A$120 a day but expects that rising fuel prices could reduce his take-home income significantly. With vehicles requiring frequent refuelling and air-conditioning essential in tropical temperatures, Thomas said higher costs may force drivers to raise fares despite concerns about passenger affordability.

Across Vanuatu, many drivers are servicing loans on their vehicles, increasing financial vulnerability. Thomas said without fare increases, drivers may struggle to meet repayments, highlighting the limited options available to absorb cost shocks.In South Korea, the response has included policy measures to reduce fuel consumption.

Kim Hooin, a public sector worker commuting from Cheongju to Sejong, said mandatory vehicle restrictions introduced in late March have altered daily routines. Under the system, government employees are prohibited from driving one day a week based on licence plate numbers, encouraging greater use of public transport.

Kim said he now takes the bus daily, extending his commute time but reducing fuel expenses. At work, he manages government vehicles and said usage is being tightly controlled, with electric vehicles prioritised where possible. The government has also promoted broader energy-saving measures, including reduced water and electricity use, framing the campaign as a collective response to economic pressures.

In rural Surin Province, small-scale trader Teerayut Ruenrerng said fuel shortages and price increases have disrupted both supply chains and daily operations. Running a mobile grocery business, he often visits multiple fuel stations to secure limited quantities of diesel. Inconsistent access has made it difficult to plan routes and maintain regular sales.

Ruenrerng said rising input costs, including higher prices for meat, produce and packaging, have reduced profits by up to 20%. Supply disruptions mean that orders are frequently only partially fulfilled, forcing adjustments to inventory and pricing. He has increased some retail prices but said doing so risks losing customers in already constrained markets.

In Tokyo, Koichi Matsumoto, who operates a traditional bathhouse established by his family in the 1930s, said energy costs are a growing concern. Although the business switched from oil to gas five years ago, heating expenses remain high and are expected to increase further if global energy markets tighten.

Bathhouse operators face additional constraints, including regulated pricing set by local authorities. Matsumoto said admission fees cannot be raised freely, limiting the ability to offset rising costs. With declining customer numbers and ageing infrastructure, he said many similar establishments are weighing whether to continue operating.

In Sydney, interior designer Belinda Morgan said uncertainty linked to global energy markets is affecting demand in the construction sector. She said projects have slowed as clients delay spending decisions, prompting her to seek additional work and cut household expenses.

The family is reassessing routine activities, including discretionary travel, to conserve fuel and money.In Delhi, warehouse worker Rajesh Singh described a more acute impact, with rising cooking gas prices and food inflation forcing him to reduce meals. Earning about 12,000 rupees per month, he said essential expenses including rent and food have surged, leaving little room for savings. He reported eating once a day in recent weeks and borrowing money to manage basic needs.

Singh said several colleagues have already left the city due to rising costs, and he is considering returning to his home village if conditions do not improve. The situation reflects broader pressures on low-income urban workers facing simultaneous increases in energy, housing and food prices.

In Beijing, taxi driver Cui Xinming said fuel price increases have added to the strain of long working hours. Driving up to 12 hours a day, he said rising costs are a concern but expressed confidence in government measures to stabilise prices. He noted that China’s investment in alternative energy and electric vehicles could reduce reliance on oil over time.

Cui said he is considering leaving the profession due to fatigue and changing economic conditions, highlighting how cost pressures are influencing career decisions in addition to daily finances.

Across regions, the accounts point to a common pattern: rising fuel costs are feeding through supply chains, increasing the price of goods and services while compressing incomes. For many, the adjustments involve reducing consumption, raising prices where possible, or reconsidering long-term plans in an increasingly uncertain economic environment.

Jorgensen said the bloc is assessing “all possibilities” as it braces for sustained disruption, warning that energy prices are likely to remain elevated for an extended period. “This will be a long crisis energy prices will be higher for a very long time,” he said in the interview.

He added that for certain critical energy products, market conditions could deteriorate further in the coming weeks, underscoring concerns about supply constraints and volatility linked to the conflict.

The European Union has previously relied on coordinated measures such as strategic stock releases and demand reduction during periods of supply stress. Officials are now evaluating whether similar or more stringent interventions may be required if the crisis deepens.

The developments come as geopolitical tensions in the Middle East continue to disrupt global energy flows, raising risks for import-dependent economies and adding pressure to inflation across the region.

The FAO Food Price Index, which tracks international prices of a basket of widely traded food commodities, averaged 128.5 points in March, up 2.4% from a revised February level, according to the agency.

The increase reflects upward pressure in global food markets, though the FAO did not specify individual commodity drivers in its summary release.

In a separate report, the FAO slightly raised its forecast for global cereal production in 2025 to a record 3.036 billion metric tons, representing a 5.8% increase compared with the previous year.The updated outlook suggests improved supply prospects for staple crops, even as price trends point to continued volatility in international food markets.

The Nifty 50 gained 1.56% to close at 22,679.40, while the BSE Sensex advanced 1.65% to 73,134.32, marking a strong start to the new fiscal year after steep losses in March.Fourteen of the 16 major sectors ended higher, with broader markets outperforming.

The Nifty Smallcap 100 rose 3.3% and the Nifty Midcap 100 climbed 2.2%, reflecting renewed risk appetite among investors.Global equities also surged, with Asian markets posting their biggest one-day gain since November 2022 and Europe’s STOXX Europe 600 rising 2.1%, as easing geopolitical concerns buoyed sentiment.

Oil prices retreated, with Brent crude falling to around $103 per barrel after remarks by Donald Trump indicated a potential exit from the Iran conflict. Investors are now awaiting further updates in a scheduled address on Thursday.

“The markets are at levels where opportunities may emerge across sectors, though risks remain,” said Prateek Agrawal.

Indian equities had declined sharply in March, with both the Nifty 50 and Sensex falling more than 11% each, their steepest monthly losses in six years, as foreign investors pulled out a record $12.7 billion amid heightened geopolitical uncertainty.

Analysts said a resolution to the Middle East conflict could support the rupee and revive foreign portfolio inflows, reversing the trend seen in March after earlier buying in February.

Gains on Wednesday came despite higher domestic fuel prices, with retailers raising rates for jet fuel and commercial liquefied petroleum gas.

Shares of companies in sectors such as fertilisers, restaurants, tourism and rice exports led the advance as optimism over easing global risks outweighed cost concerns.

The HSBC flash India Composite Purchasing Managers’ Index, compiled by S&P Global, fell to 56.5 from February’s 58.9, missing expectations in a Reuters poll and marking the sharpest slowdown in 18 months. While readings above 50 indicate expansion, the drop signalled a loss of momentum at the end of the fiscal year.

Manufacturing slowdown deepensThe manufacturing sector bore the brunt of the slowdown, with its PMI declining to a 4-1/2-year low of 53.8 from 56.9. Factory output growth weakened to its softest pace since August 2021, reflecting heightened uncertainty and subdued consumer demand.

The services sector, which makes up the bulk of India’s economy, also eased, with its PMI slipping to 57.2 from 58.1.Cost pressures intensifyInput costs rose at their fastest pace since June 2022, driven by higher prices for oil, energy, food, metals and chemicals.

Firms responded by increasing selling prices at the quickest rate in seven months, though some absorbed costs by compressing margins.India’s heavy reliance on imported energy has amplified the impact.

As the world’s third-largest oil importer, it sources about 90% of its crude and nearly half of its natural gas from overseas, making it vulnerable to price shocks linked to disruptions in the Strait of Hormuz. Oil prices have risen more than 40% since the conflict began.

External demand offers supportDespite weakening domestic demand, international orders rose to their highest level since the sub-index was introduced in 2014, with businesses reporting increased demand from Asia, Europe, the Americas and the Middle East.

Business confidence improved to its strongest level since September 2023, supporting the fastest pace of job creation since August, even as inflation risks mount and growth prospects face renewed pressure.