New Delhi, 13 September (IANS). According to a latest report, low headline inflation and interest rates among global challenges will provide significant support to domestic demand in the economy.
According to the report by the rating agency Crisil, in FY 2026, the headline inflation is now expected to be reduced from 3.5 to 3.2 percent. As a result, the consumer price index (CPI) inflation for this financial year will decline by 140 basis points (1.4 percent).
The report further states, “This intense softening means that the consumer price index (CPI) inflation will decline by 140 basis points in this financial year, which will make a scope of relaxation in monetary policy. We believe that RBI will cut the rates of 25 basis points this year.”
According to official data, India’s Consumer Price Index (CPI) based inflation rose marginally to 2.1 percent in August, which was 1.6 percent in July and crossed the RBI’s 2 percent lower tolerance band.
The report stated that food inflation has started going above a very lower level, including statistical low-line effects. CFPI -based food inflation in rural areas recorded -0.70 percent (provisional) in July 2025 compared to -1.74 percent in July 2025.
However, the report warns that excessive rainfall may pose a risk for kharif crops, which may potentially affect food prices.
The rating agency also noted that non-food inflation remains benign or expected to be reduced even further, which has the support of softening in core inflation due to low oil prices and reduction in GST rates.
Fuel inflation declined from 2.7 percent to 2.4 percent due to low prices of kerosene, electricity and firewood.
The core inflation increased from 4.1 percent to 4.2 percent due to increase in gold prices globally, while inflation declined in health and education sectors.
-IANS
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