HSBC Global Research predicts the Reserve Bank of India will reduce interest rates by 25 basis points during the fourth quarter of calendar year 2025. Economic growth weakness, driven by declining export orders and reduced government spending, fuels this expectation. Abundant cereal harvests, filled storage facilities, reduced oil costs, and affordable Chinese exports will maintain lower inflation levels for extended periods. The brokerage firm projects current quarter inflation at 1.8 percent, below the central bank's 2.1 percent estimate. September consumer price inflation should fall between 1 and 1.5 percent.
Gold prices surge 40 percent annually, contributing 43 basis points to August's Consumer Price Index and sustaining elevated core inflation. Recent goods and services tax reductions will moderate personal care product price increases over the coming months. Rainfall disruptions pushed vegetable and fruit costs higher in August, while cereal and pulse prices decreased. Core inflation excluding food, fuel, housing, and gold reached 3.2 percent yearly, substantially below regulatory targets. Flooding in Northwest India, particularly in Punjab, remains a significant challenge to agricultural production.
Gold prices surge 40 percent annually, contributing 43 basis points to August's Consumer Price Index and sustaining elevated core inflation. Recent goods and services tax reductions will moderate personal care product price increases over the coming months. Rainfall disruptions pushed vegetable and fruit costs higher in August, while cereal and pulse prices decreased. Core inflation excluding food, fuel, housing, and gold reached 3.2 percent yearly, substantially below regulatory targets. Flooding in Northwest India, particularly in Punjab, remains a significant challenge to agricultural production.
