India's annual monsoon is likely to be 96 percent of the long-term average, which would make it the worst season in five years, although the near normal forecast raised hope for economic support and bumper crops. While the Indian Meteorological Department's predictions have often varied substantially from the actual June-September monsoon rains, vital for key crops such as sugarcane and rice and overall rural activity and a major factor for the economy, the relatively upbeat forecast cheered many in the market. "This is very encouraging given that agricultural performance above 3 percent is critical to realise GDP growth between 6 to 6.5 pct," said Rupa Rege Nitsure, chief economist at the Bank of Baroda in Mumbai. Still, a 96 percent outcome would be the weakest since a relatively dry spell in 2004, which was followed by years in which the monsoon exceeded 98 percent of the average. "IMD's long range forecast for the 2009 south-west monsoon season (June to September) is that the rainfall for the country as a whole is likely to be near normal," the agency said. It cautioned there were still "equal probabilities" for the development of the La Nina or El Nino systems before May 2009, which could still swing the forecast toward wetter or drier weather respectively. It said rainfall in the June-September may exceed or lag the forecast by 5 percent. The forecast will be updated in June. Some weather scientists were expecting the monsoon to be close to normal as the El Nino weather pattern, which brings dry weather, was unlikely to develop, while higher-than-normal temperatures had also brightened prospects of better rains. "There is no sign of El Nino as of now," D. Sivananda Pai, director of government-run National Climate Center at Pune, told Reuters. He said the weather office regarded rainfall to be nearly normal if it ranged from 96 percent to 104 percent of the long-term average. CRITICAL FOR CROPS Good monsoon rains should raise sugar output, which is set to halve this year, making India a big factor in international sugar prices, and rice crop which is planted during the season. Monsoon rains are a major influence on output of key crops, economic activity and also affects sentiment in the country's financial markets. Last year, the monsoon rainfall was 98 percent of the long-term average, just below the weather office's forecast for 99 percent. But in 2002, rains were far short of the forecast, leading to the country's worst drought in 15 years. Monsoon rains are a key driver of rural income, which is keeping alive demand for various goods and services during the economic slowdown. Analysts say the forecast of normal monsoon rains would not necessarily lead to good crop output as the overall forecast is silent on how rains are spread across the country, which means that even if there is a drought and floods in different regions, it can still be a normal monsoon statistically. Last year, late rainfall in some regions affected sugarcane plantation, contributing to the fall in output. P. Chengal Reddy, secretary general of the Consortium of Indian Farmers Association, said forecasts would help agriculture only if they were more specific. "As a farmer, I need specific forecasts, like in developed countries where they make predictions for a 2 km radius. If I know it will rain in the evening, then I won't spray pesticides as they will get washed away," he said. Economists agree. "Distribution is becoming very important and not being forecast. Normally we come to know when it has happened. There is no way to know beforehand," said T.K. Bhaumik, chief economist, J.K. group of Industries.