Categories: Economy

Nomura cuts India’s GDP forecast for 2023 to 4.7%

Nomura has cut its 2023 forecast for economic growth in India, as measured by the gross domestic product (GDP), to 4.7 per cent from its earlier projection of 5.4 per cent amid recession fears and rising interest rates. Exports have started to struggle, while elevated imports are pushing up monthly trade deficits to record highs. Higher inflation, monetary policy tightening, dormant private CAPEX growth, the power crunch and the global growth slowdown pose medium-term headwinds.

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Meanwhile, the recent economic releases have not been too encouraging. India’s retail inflation rate – the CPI – came in at 7.01 per cent versus 7.04 per cent in May. This is the sixth consecutive month that the CPI inflation has remained above the Reserve Bank of India’s (RBI’s) comfort zone of 2 – 6 per cent. The Index of Industrial Production (IIP), however, grew at a faster clip of 19.6 per cent in May, as compared to 6.7 per cent in April, data showed.

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Sumit Arora

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