New Delhi, Sep 4
The GST tax rate cuts can further lower inflation if companies pass on all benefits to the consumers, allowing the Reserve Bank of India (RBI) to cut repo rate once again by 25 bp in the fourth quarter this year, a report said on Thursday.
The GST tax rate cuts can lower headline CPI inflation by 1 percentage point.
"However, if the pass-through is only partial, the inflation fall could be closer to 0.5 ppt. We expect the RBI to cut rates once again by 25bp in 4Q25, taking the repo rate to 5.25 per cent," an HSBC report said.
On the consumption side, several essential items saw a rate cut (toothpaste, shampoo, small cars, air conditioners, and medicines).