Nomura ups FY24 Indian GDP estimate to 6.7%, foresees 5.6% GDP in FY25

05 Dec '23

2 min read

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Nomura has revised its real GDP growth estimate for India for FY24 to 6.7 per cent from 5.9 per cent earlier.
Economists at the Japanese brokerage, however, still expect a slowdown in growth to 5.6 per cent in FY25.
It expects a slowdown in public capital expenditure ahead of the general election next year.
Private consumption and private capex remain weak.

Nomura recently revised its real gross domestic product (GDP) growth estimate for India for fiscal 2023-24 (FY24) to 6.7 per cent from 5.9 per cent earlier.

Economists at the Japanese brokerage, however, still expect a slowdown in growth to 5.6 per cent in FY25.

A note by Nomura economists cited a likely slowdown in public capital expenditure (capex) ahead of the general election next year, continued sluggishness in rural demand and private capex, waning terms of trade tailwind, and a likely global growth slowdown for its call on the sharp moderation in FY25, a news agency reported.

The September quarter growth at 7.6 per cent was led by a stronger pick-up in fixed investment and government consumption (on the demand side) and stronger manufacturing and construction output growth (on the supply side).

Overall, the government appears to be in the driver’s seat both for consumption and investment while private consumption and private capex remain weak, the note said.

Lower commodity prices have also boosted firm profits, implying a major growth tailwind due to terms of trade, it said.

The central bank is expected to upwardly raise its FY24 GDP growth estimate to up to 6.7 per cent from the 6.5 per cent now, the brokerage added.

ALCHEMPro News Desk (DS)

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