A new prediction has been made about the Indian economy from Tokyo, 5,800 kilometres from New Delhi. This prediction has come from Tokyo, where the headquarters of the Nomura brokerage house is located. The brokerage firm has predicted that the growth of the country’s economy may remain sluggish in the fiscal year 2025. This new prediction is estimated to be about 50 basis points lower than the RBI’s estimate. Earlier, Nomura had estimated India’s GDP growth at 6.9 per cent. On the other hand, the RBI has estimated 7.2 per cent. We also tell you what Nomura said.
Nomura changed its estimate
Nomura, one of the world’s largest brokerage firms, on Tuesday estimated that India’s GDP growth rate will soften to 6.7 percent in fiscal 2025, lower than the Reserve Bank of India’s forecast of 7.2 percent, and in fiscal 2026 there is a risk that GDP will fall below the 7.2 percent estimate. Nomura says that signals currently being seen regarding the economy are mixed. A report says rising government spending and rural demand are positive, but discretionary consumer demand, industrial demand and weakening external demand are negative.
What were the numbers like before?
India’s economy grew 8.2 per cent in FY24, making it the world’s fastest-growing major economy. However, its growth in the April-June period of FY25 fell to a five-quarter low of 6.7 per cent compared with a year ago because agricultural and trade-related services output had declined. Nomura said sales of passenger vehicles (PVs) and medium and heavy commercial vehicles (MHCVs) are important in assessing cyclical growth. PVs indicate discretionary consumer demand, while MHCV sales are a high beta of overall industrial activity.
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How much will photovoltaic sales decline?
The Nomura report states that both PV and MHCV sales have disappointed significantly in July and August. The decline in growth is being seen due to lack of demand in the wake of the pandemic, high interest rates and slowdown in government spending due to elections. On the other hand, wholesale sales growth of PV fell by 2 percent in July and 2.5 percent in August, while MHCV sales growth fell by 7.1 percent and 10.7 percent respectively. There is a significant increase in the stock of PV. The stock days that were 55 to 60 days in May have increased to 70 to 75 days in August. Now hopes are pinned on the festive season.
The World Bank and the IMF had expressed confidence
Last week, the World Bank raised the growth forecast for the Indian economy for fiscal year 2025 to 7 per cent from the earlier estimated 6.6 per cent, due to improvement in the agricultural sector, private consumption and rural demand. Moody’s has also raised its economic growth forecast for India to 7.2 per cent in 2024 and 6.6 per cent in 2025. While experts say there may be a pick-up in growth in the coming months, geopolitical tensions, the US crisis and the US presidential election are also seen as a major reason.
