India’s final GDP growth estimate to be revised lower, says Nomura

The final economic growth estimate for India is likely to be revised lower, said Nomura in a note, after the central government pegged GDP growth in FY25 at 6.4 per cent in its first advance estimates released on Tuesday.

“We expect advance GDP estimates to be revised lower,” the note said, adding “We note that the first advance estimates are prone to large revisions, depending on the stage of the business cycle.”

The economy grew at 8.2 per cent in FY24, and the government’s advance estimate for the current fiscal year is below the finance ministry’s forecast of 6.5 per cent and 6.6 per cent projection by the Reserve Bank of India.

The note by Nomura pointed out that considering the advance estimates by the government are based on partial data and with the economy on a slowdown phase, it expected a downward revision in the growth rate and closer to its own estimate of 6.2 per cent.

“Growth has been a mixed bag during the festive season of October-November, especially for consumption, industrial  and investment growth has been mostly tepid, and early data for December do not suggest a strong rebound thus far,” it said.

It said it believed that India was in the midst of a cyclical slowdown led by headwinds such as fading urban pent-up demand, tight monetary policy, stress in household balance sheets, slowing nominal income growth and a negative credit impulse.

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