Benign inflation outlook may lead to rate cut supporting growth: Crisil Intelligence

Kolkata, Oct 15 (PTI) Crisil Intelligence, in its report for October 2025, said that a benign inflation outlook may prompt the Monetary Policy Committee (MPC) to cut policy rates to support growth.

The MPC kept policy rates unchanged during its review meeting on October 1, and maintained a neutral policy stance, the report said.

"We expect the consumer price index (CPI) inflation to soften to 3.2 per cent in the current financial year from 4.6 per cent in the last fiscal. The benign inflation outlook is likely to prompt the MPC to cut policy rates to support growth which faced downside risks due to imposition of higher US tariffs in the second half of the fiscal," the report said.

Referring to the fiscal health of the economy, the report said the government has targeted a reduction in the Centre's fiscal deficit to 4.4 per cent of the GDP in the current financial year from 4.8 per cent in the previous fiscal.

The government plans to borrow Rs 6.77 lakh crore from the market in the second half of the current financial year as against Rs eight lakh crore in the first half.

Overall, the gross market borrowings is estimated to be five per cent higher at Rs 14.7 lakh crore in the current financial year, according to the report.

The report said crude oil prices are likely to average USD 62 to USD 67 per barrel in the current financial year compared to the average of USD 78.8 per barrel in the last financial year.

The current account deficit is expected to remain in the comfort zone of one per cent of the GDP in fiscal 2026 compared to 0.6 per cent of GDP in fiscal 2025, the report said. PTI dc NN