India’s inflation expected at 2.1% in FY26: Report

New Delhi: The average inflation for the current financial year (FY26) is expected at 2.1 per cent, due to subdued food inflation and contained demand pressures, a report said on Wednesday. “From a monetary policy perspective, if growth weakens in H2 FY26, the latest inflation readings could create scope for a rate cut,” CareEdge Ratings said in its report.

The ratings agency maintained its FY26‑end USD/INR forecast at 85–87, due to a softer dollar, a firm yuan, a manageable current account deficit (CAD) and expectations around the US-India trade deal. The report also projected that global trade volumes will grow at about 2.9 per cent on average in 2025-26. It also cited IMF estimates that India’s exports of goods and services can moderate to roughly 16 per cent of GDP by 2030, from 21 per cent currently.