Nomura sees India’s macro sweet spot extending into H2 of FY25
Global brokerage firm Nomura has stated that India’s macroeconomic fundamentals are anticipated to stay robust in the second half of FY25, supported by consistent growth and low underlying inflation.
Nomura expects a decline in India’s consumer price index from 5.7 percent at the end of FY24 to 4.8 per cent in the first quarter of the current fiscal (FY25), calling the low, underlying inflation a standout in the global context of “sticky inflation”.
According to Nomura, food inflation is expected to ease due to the shift to La Niña, sufficient rice stocks, and increased pulse production.
Nomura analysts also predicted a continued emphasis on capital expenditure and fiscal consolidation in the upcoming Union budget. The brokerage firm holds a positive outlook on domestic sectors such as manufacturing and investment themes, prioritizing them over consumption.
Nomura previously indicated that the Union Budget is likely to underscore a consistent policy direction. They anticipate the government’s commitment to fiscal consolidation and prioritization of investments and capital expenditure.
The global brokerage firm highlighted that despite political challenges, reforms in India have progressed, expecting the government to maintain momentum in governance and administrative reforms while navigating more complex reforms related to land and labor at the state level.
Reports suggest India’s economic fundamentals remain robust, supported by favorable growth prospects, inflation dynamics, current account status, and fiscal management.
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