Nomura sees slowdown in India's GDP growth
Says India's optimism misplaced, sharply moderates FY24 GDP growth forecast to 5.2%
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Mumbai: Japanese brokerage Nomura has projected a sharp moderation in India's growth rate for FY24 to 5.2 per cent as compared to FY23, saying Indian policymakers are misplaced about their optimism on the country's growth prospects.
After a week-long meetings with policymakers, corporates, commercial banks and political experts, its economists said its FY23 GDP growth estimate is at 7 per cent – at par with the RBI's revised down forecast – but it expects a sharp moderation to 5.2 per cent in FY24.
"While we broadly agree with our interlocutors on the growth prospects in FY23, we believe the optimism in FY24 may be misplaced and that the spillover effects from the global slowdown are being underestimated," its economists Sonal Verma and Aurodeep Nandi said in a note.
The RBI has hiked repo rate by 190 basis points since May to tame inflation and is expected to do more, especially amid faster rate tightening by the US Fed, which is bound to impact growth. The economy grew at 4 per cent in FY20 in a multi-year low. The estimated slowdown in growth in FY24 will come ahead of the next general elections. Indian policymakers have frequently spoken about the need to have a sustained growth of over 7 per cent for achieving long-term economic ambitions.
The brokerage said the mood in the country is relatively positive with risks seen emanating from weaker global demand, and added that domestic recovery is getting broad-based as seen through pick-up in investments and higher credit growth.
