Recent GST rate cuts to help lower inflation over next year: Finance Ministry report
The Finance Ministry in its monthly report has said that recent goods and services tax (GST) rate cuts will help lower inflation over the next year and also bring a further upside bias to the country's growth prospects. However, he said ‘this is not the time to drop our guard. Uncertainties and risks persist’. Moreover, he said that for now, the risks appear manageable, but they are there.
It stated if tariff uncertainties persist, there will be an impact on export sectors, with spillover risk to domestic employment, income and consumption. The decision by the US government to impose a fee hike on new H1B visa-seekers is a reminder of the risks of trade uncertainties, affecting the hitherto unaffected services sector.
Further, it said the central government's reform agenda is expected to cushion the economy against the adverse effects of trade disruptions. The near-term outlook, therefore, is characterised by steady, reform-driven growth rooted in macroeconomic discipline and adaptive economic diplomacy, with ongoing vigilance warranted against external shocks and global market volatility.
