US Fed Rate Cut Paves the Way for India's Policy Changes

Crisil Chief Economist D K Joshi discusses the impact of the US Fed rate cut on emerging economies like India. He anticipates a reduction in food inflation for FY25, potentially leading to RBI rate cuts this calendar year. The growth momentum, private sector investments, and infrastructural reforms are also highlighted.

The US Federal Reserve's recent rate cut by 50 basis points will facilitate central banks in emerging economies, including India, to slash key policy rates, according to Crisil Chief Economist D K Joshi.

Crisil expects food inflation to decline for FY25, provided the monsoon remains favorable. Joshi stated that rate cuts in India are likely when there is a sustained reduction in food inflation. Currently, the forecast is that the Reserve Bank of India might cut key policy rates within this calendar year.

India's growth momentum continues, with the economy showing positive private consumption and strong investment, projecting a GDP growth of 6.8% for this fiscal year. Furthermore, infrastructure development, especially in port facilities, remains crucial for boosting trade and ensuring economic stability, as per the S&P Global's report.

(With inputs from agencies.)