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India’s economy is likely experiencing a cyclical slowdown, with growth projected to slip below 6.7%, Global financial services group Nomura noted
Urban consumption is softening, attributed to high interest rates and moderating wage growth.
Real salary hikes for urban workers are lower, affecting spending power.
Companies are reducing salary expenditures, leading to decreased real wage growth.
The initial surge in demand following the pandemic has diminished.
Tight monetary policy and the RBI’s measures to curb risky credit are impacting personal loans.
Nomura projects GDP growth of 6.7% for this year and 6.8% for 2025-26, but warns of rising downside risks.
The RBI’s optimistic forecast of 7.2% growth for 2024-25 is seen as overly optimistic.
Both coincident and leading indicators suggest a further moderation in economic growth.
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