New Delhi, Sep 13
Lower headline inflation and reduced interest rates are set to extend broader support to domestic demand in the economy amidst global headwinds, a report has said.
The headline inflation is now projected at 3.2 per cent in fiscal 2026, down from the earlier estimate of 3.5 per cent. This results in a 140 basis points (1.4 percentage points) decline in CPI inflation for this fiscal year, according to the report from ratings agency Crisil.
"This sharp moderation implies a sizeable 140 basis points (bps) decline in CPI inflation this fiscal, opening space for monetary easing. We believe the RBI will cut rates by another 25-bps this year," the report added.
India’s consumer price index (CPI)-based inflation increased marginally to 2.1 per cent in August, up from 1.6 per cent in July, surpassing the Reserve Bank of India’s (RBI) lower tolerance band of 2 per cent, according to official data.