Nomura Cuts India's FY25 GDP Growth Forecast to 6.7% Amid Slower Economic Expansion
In a recent report, Nomura has revised down its FY25 economic growth projection for India to 6.7% year-on-year from the previous estimate of 6.9%. This adjustment comes after official data revealed that the country's gross domestic product (GDP) expanded at a slower pace than anticipated in the April-June quarter.
India's GDP grew by 6.7%, falling short of the 6.9% forecast by a Multibagger poll and the 7.8% growth recorded in the previous quarter. The decline in government spending during national elections was cited as a key factor weighing on economic performance.
Analysts at Nomura acknowledged that the Q2 GDP figures were weaker than expected, attributing the slowdown to a mix of transitory factors like elections and more persistent issues such as slowing profit growth. Despite this, they believe that the economic deceleration will be temporary, with easing inflation and increased government spending expected to bolster growth in the near future.
However, Nomura cautioned that challenges remain, including lower corporate profit growth and a moderation in credit expansion, which are likely to persist and limit overall economic expansion.
On a separate note, Goldman Sachs and J.P. Morgan have maintained their GDP forecast for India at 6.5% for FY25.
In conclusion, the downward revision in India's economic growth forecast highlights the challenges facing the country's economy. Investors and individuals should monitor these developments closely to understand how they may impact their investments and financial well-being. It is crucial to stay informed and adapt investment strategies accordingly to navigate the changing economic landscape effectively.