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New Delhi, Oct 19: An additional policy rate cut is expected before the end of the year, alongside recent GST simplifications, indicating that peak fiscal consolidation is behind us. These factors, combined with domestic regulatory easing, are likely to foster a gradual recovery in credit demand, said a report by Goldman Sachs.

“We expect an additional policy rate cut before year-end, and the recent GST simplification signals that peak fiscal consolidation is behind us. We expect this, along with domestic regulatory easing, to foster a gradual recovery in credit demand,” the report added.

The report noted that the RBI’s recent measures should ease supply-side credit conditions; however, the extent of incremental lending will depend on demand dynamics in the broader economy.

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