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Inflation expected to average 4.5% this fiscal year: CRISIL

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Leading ratings and economic research firm CRISIL predicts that inflation will average around 4.5% for the current financial year. This projection is based on the assumption of a normal monsoon. Food inflation is expected to decrease, while non-food inflation may rise slightly. The Consumer Price Index (CPI) inflation rate declined marginally to 4.75% in May, down from April's 4.8%. The report highlights concerns over persistent increases in food categories, particularly cereals and pulses. Despite this, rural demand is expected to catch up with urban consumption due to expectations of an above-normal monsoon, while tighter credit conditions may impact the urban economy. Growth in goods exports could also be constrained by slower global growth. As a result, GDP growth is anticipated to slow to 6.8% in the current fiscal year compared to the previous year's 8.2%.

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