New Delhi, Sep 13 || With August inflation print a tad higher than the 2 per cent mark, a rate cut in October is unlikely, according to a report by SBI Research, adding that even a rate cut in December looks a little difficult if growth numbers for Q1 and estimated Q2 data are taken into consideration.
As the Goods and Service Tax (GST) rate on around 295 essential items has been reduced from 12 per cent to 5 per cent or NIL, the consumer price index (CPI) inflation in this category may come down by 25-30 basis points in FY26 after considering a 60 per cent pass through effect on food items, said the report.
Apart from this, the rationalisation of GST rates of services should also lead to another 40-45 bps reduction in CPI inflation on other goods and service items, considering a 50 per cent pass-through effect.
"Overall, we believe CPI inflation may be moderated in the range of 65-75 bps over FY26-27," SBI Research said.