MUMBAI: Japanese brokerage Nomura has taken a critical stance against the Reserve Bank of India’s (RBI) 7.2 per cent GDP growth forecast for FY25, calling it “overly optimistic.” According to Nomura, India has entered a “cyclical growth slowdown,” with indicators pointing to further moderation in GDP expansion.
Nomura’s own estimates stand lower, predicting GDP growth at 6.7 per cent for FY25 and 6.8 per cent for FY26, with “rising downside risks” for both projections.
The brokerage highlighted weakening urban demand, citing drops in passenger vehicle sales, a slowdown in airline traffic, and stagnant FMCG sector sales as evidence.
Nomura also pointed to a deceleration in real salary growth, with wage expenses for listed companies falling by 0.8 per cent in the September quarter after inflation adjustments, down from 1.2 per cent in June and 2.5 per cent in FY24.
Nomura attributed part of the slowdown to fading post-pandemic demand and the impact of tighter monetary policy. Additionally, RBI’s recent efforts to curb unsecured lending appear to be weighing on credit growth from non-banking financial companies.
