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Deutsche Bank says lowering GST rates could help reduce inflation
Deutsche Bank thinks lowering GST rates could help bring inflation down by about 0.25%.
Still, they're keeping their growth forecast steady at 6.5% for both FY26 and FY27, saying there are a lot of economic uncertainties right now.
Bank sees growth slowing a bit next year
India's economy grew a strong 7.8% in April-June 2025, but the bank warns things could get tricky later with a possible tariff shock in late FY26.
They see growth slowing a bit next year and expect inflation to average around 3% in FY26 and rise to 4.5% in FY27.
If GST rates drop, the government could lose ₹40,000-50,000 crore in revenue—pushing the fiscal deficit slightly above what was planned for FY26.
Basically: cutting taxes sounds good for prices but comes with trade-offs for the country's budget.