Inflation to average 3.2 pc in FY26, to boost mass consumption: Report
Supported by favourable weather conditions, inflation is projected to average 2.5 per cent over the next six months. According to an HSBC report released on Monday, a high base effect from the past three years, coupled with robust cereal production, is expected to keep food inflation in India subdued for an extended period.
Core inflation, too, remains contained, led by a stronger Indian rupee, falling commodity prices, imported disinflation from China, and softer growth than a year ago, said HSBC Global Investment Research in its report. It said it expects inflation to average 3.2 per cent in FY26.
FY25 concluded on a strong note for India's granaries, with robust cereal production ensuring ample stock levels. This abundance is expected to help contain cereal inflation in the near term.
“But what matters a bit more is how rains, reservoir levels, and sowing will pan out in FY26,” said the report.