The easing of interest costs is emerging as a broad-based positive for the economy, benefiting homebuyers, MSMEs, and the corporate sector alike. Lower borrowing rates are expected to encourage fresh investments by companies, supporting growth momentum while also easing pressure on balance sheets. A reduction in finance costs helps stabilise profitability, particularly at a time when margins are under stress.
However, the impact is unlikely to be uniform across sectors. For most non-financial companies, interest expenses account for around 2–3% of turnover, limiting the immediate upside. In contrast, capital-intensive industries—where interest costs can rise to nearly 10% of turnover—stand to gain more significantly from a lower interest rate environment.
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