Nomura Prediction for India in FY24: Nomura predicts that India’s growth will drastically slow down to 5.2% in 2023–24 (FY24) from 7% in the current fiscal year due to the spillover effects of the global downturn. The Japanese brokerage batted for policy vigilance amid the global headwinds, and underlined that macro stability should be the priority, more than growth.
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Nomura Prediction for India in FY24: Key Points
- In FY20, the economy grew at 4%, a multi-year low. It is anticipated that growth will decelerate in FY24, just before the following national elections.
- Nomura expects inflation to average at 6.8% in FY23, a tad above the Reserve Bank of India’s 6.7% estimate, and cool down to 5.3% in FY24. “We share the consensus view that inflation will remain elevated in the foreseeable future and core inflation will remain sticky,” it said.
- Spending reductions would be required in order to fulfil the 6.4% budget deficit objective for FY23, and it was noted that a target of under 6% for FY24 was “circumspect”.
- The company predicted that the RBI will boost the terminal repo rate by 25 basis points in February and 35 basis points in December, respectively, to reach 6.50%.
- Since May, the RBI has increased the repo rate by 190 basis points to control inflation.
