Average inflation for FY26 seen at 3.5%; urban consumption to pick up over next 2 quarters: Suvodeep Rakshit

Kotak Institutional Equities’ Chief Economist, Suvodeep Rakshit, anticipates headline inflation to remain between 3-3.5% for a prolonged period, averaging around 3.5% for FY26. While early monsoon onset is positive, rainfall data shows a deficit. Urban consumption remains weaker than rural, but a cyclical recovery is expected with government spending and policy easing.