Overview
- Goldman Sachs expects a further 25-basis-point reduction before year-end, citing GST simplification and regulatory easing as supports for credit demand.
- The Monetary Policy Committee kept the repo rate at 5.5% in its latest review, with the policy statement saying conditions have opened space for easing.
- Government GST changes that removed the 12% and 18% slabs are being read as a shift away from peak fiscal consolidation, which could lift demand and lending.
- The RBI’s October bulletin reports resilience in domestic activity, upgrades FY26 growth to 6.8%, and notes CPI cooled to about 1.5% in September, the lowest since 2017.
- External headwinds persist, including US tariffs reported as high as 50% and higher H-1B costs, with exports to the US down 12% year-on-year in September and 37.5% over four months.