India’s GDP growth slowed to 5.4% YoY in Q2 FY25, sharply below Nomura’s estimate of 6.5%. Agriculture grew at 3.5%, but manufacturing and mining recorded growth rates of 2.2% and -0.1%, respectively, highlighting widespread weakness in domestic demand and capex trends. Services remained the only relatively bright spot in the data.
Nomura has cut its FY25 GDP growth forecast to 6% from 6.7%, citing structural and cyclical challenges. The firm noted that while transient factors like prolonged monsoons and a pre-festive demand lull contributed to the slowdown, more persistent issues like waning post-pandemic demand and weak private capex have also played a role. Nomura expects a 100-basis point rate cut starting in December to support growth recovery.
