Prolonged excessive temperatures will curb wheat manufacturing and result in prolonged energy outages, exacerbating already excessive inflation and hurting development, a credit score destructive for the nation, Moody’s Investors Service mentioned on Monday.
“Over the longer term, India’s highly negative credit exposure to physical climate risks – which contributes to the country’s highly negative environmental risk, issuer profile score and credit impact score – means its economic growth will likely become more volatile as it faces increasing, and more extreme, incidences of climate-related shocks,” it mentioned.
Moody’s has the bottom investment-grade credit standing of Baa3 with a steady outlook for India. On May 15, New Delhi recorded a most temperature of 49 levels Celsius, marking the fifth heatwave within the metropolis since March. Although heatwaves are pretty widespread in India, they normally happen in May and June.
The authorities has revised down its estimates for wheat manufacturing by 5.4% to 105 million tonnes (MT) for the crop yr ending June 2022, given decrease yields amid larger temperatures. The decrease manufacturing, and fears {that a} surge in exports to capitalise on excessive world wheat costs would add to inflationary pressures domestically, have prompted the federal government to ban the export of wheat and to divert it towards native consumption as an alternative.
“Although the move will partially offset inflationary pressures, it will hurt exports and subsequently growth,” Moody’s mentioned.
Source: www.financialexpress.com”