Easing Inflation Makes Room For Higher GDP Growth

New Delhi: The decline in retail inflation to a level that is below the RBI’s targeted level of four per cent is expected to pave the way for accelerating GDP growth ahead as it provides the central bank with more headroom to cut interest rates and expand liquidity to spur economic activity and create more jobs.

A Moody’s report expects monetary easing, apart from the government’s capital expenditure and tax cuts for the middle-class, to play a key in role in accelerating India’s growth rate. The report expects the country’s GDP growth to exceed 6.5 per cent in 2025-26.

The report states that following a temporary slowdown in mid-2024, India’s economic growth is expected to accelerate and register one of the fastest rates among the world’s large economies.