New Delhi, Oct 7 – The Reserve Bank of India (RBI) could trim rates again soon. A fresh report from the Bank of Baroda says inflation expectations have fallen sharply, leaving room for more easing to boost growth.
The RBI keeps its repo rate at 5.5 %. The report notes that cutting Goods and Services Tax (GST) rates and the surge in holiday spending can spark India’s economy this quarter. These moves should lift consumer demand and help counter global headwinds.
In its September 2025 “Monthly Economic Buffet,” the Monetary Policy Committee (MPC) chose a neutral policy stance. It left rates unchanged but will watch how tariff cuts and GST changes affect activity.
The RBI now projects faster growth for fiscal year 2026, raising its outlook to 6.8 % from 6.5 %. Inflation forecasts fell too, from 3.1 % to 2.6 % for FY 2026.
High‑frequency data show some slowdown. Air traffic, port cargo, and rail freight are easing, but diesel use, government spending, and bank loans are picking up. The GST cuts and festive season are expected to lift demand in the months ahead.
India remains the world’s fastest‑growing major economy, driven by strong domestic consumption. The report estimates that GST cuts plus holiday spending could add Rs 12 to 14 lakh crore to consumption, with weddings a key driver.
P.K.
Source: ianslive
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