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Informist, Tuesday, Apr. 8, 2025

 

MUMBAI – Japanese investment bank Nomura on Tuesday cut its GDP growth forecast for India by 10 basis points to 5.9% for 2025. At the same time, it said it continues to believe that India is "the least exposed" to shocks from the US' tariff announcements. In 2024, India's GDP had grown by 6.7%.

 

"We see India as one of the least exposed within the region, as it is more domestic-demand oriented, benefits from lower oil prices and the supply-chain reshuffle. India's reciprocal tariff rate is lower than some of its competitors (China and Southeast Asia), and it is a strategic ally to the US, which means that it can benefit via trade diversion in the short term, and from the next round of supply chain shifts in low- and mid-tech manufacturing sectors in the medium term," Nomura analysts said in a report. It continues to see the GDP growing by 7.0% in 2026.

 

The cut in the growth forecast for India by Nomura comes after Goldman Sachs on Thursday lowered its forecast by 30 bps to 6.1% for 2025 and by 20 bps to 6.1% for 2026, predicting 50 bps of monetary easing by the Reserve Bank of India by December in addition to a 25 bps rate cut on Wednesday. Nomura analysts are also of the opinion that the "soft growth-inflation backdrop" supports further policy easing and they expect the repo rate to be cut by a further 75 bps "with risks skewed towards more frontloaded and deeper rate cuts".

 

"While our base case envisages a 25 bps cut (on Wednesday), in line with consensus, we see a 25% chance of a 50 bps rate cut. Also, with the RBI's proactive stance on liquidity over the past couple of months, it is possible the RBI can announce new liquidity measures this week," Nomura added.  End

 

Reported by Siddharth Upasani

Edited by Ashish Shirke

 

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