GDP growth may moderate to 7.2% in second half of 2018 due to tighter financial conditions: Nomura report

The report said tighter financial conditions, slowing global growth and adverse terms of trade will start to constrain GDP growth in second half of 2018.

Press Trust of India July 31, 2018 13:34:30 IST
GDP growth may moderate to 7.2% in second half of 2018 due to tighter financial conditions:  Nomura report

New Delhi: The Indian economy is likely to have witnessed solid economic growth in the April-June quarter but leading indicators suggest a slowdown in the coming months, says a Nomura report.

According to the global financial services major, India's economic recovery has peaked and growth rates are likely to get constrained in the second half of this year.

"Our proprietary indicators suggest the inflection point for the cyclical recovery may just be around the corner," Nomura said in a research note.

India's gross domestic product (GDP) grew at the fastest pace in seven quarters at 7.7 percent in January-March quarter on robust performance by manufacturing and service sectors as well as good farm output.

GDP growth may moderate to 72 in second half of 2018 due to tighter financial conditions  Nomura report

Representational image. Reuters

The report said tighter financial conditions, slowing global growth and adverse terms of trade will start to constrain growth in second half of 2018.

Nomura expects GDP growth to peak in April-June quarter and then moderate to 7.2 percent in the second half of 2018 from around 7.8 percent in first half.

On Reserve Bank of India's monetary policy stance, the report said the current macroeconomic conditions merit a 25 bps rate hike in the forthcoming policy meeting on August 1.

"For now, strong core momentum, sticky global oil prices and higher minimum support prices suggest conditions are ripe for another 25 bp rate hike in August. We expect a long pause on policy rates thereafter as growth and inflation slow," Nomura said.

In June, the Reserve Bank of India had upped its retail inflation projection by 0.30 percent and kept the policy stance in the neutral zone, even as it hiked the key rate by 0.25 percent to 6.25 percent.

Updated Date:

Find latest and upcoming tech gadgets online on Tech2 Gadgets. Get technology news, gadgets reviews & ratings. Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison.

also read

Centre will give govt employees cash vouchers instead of LTC to stimulate economy, says Nirmala Sitharaman
Business

Centre will give govt employees cash vouchers instead of LTC to stimulate economy, says Nirmala Sitharaman

Finance Minister Nirmala Sitharaman also announced additional capital spending and Rs 12,000 crore, 50-year interest-free loan to states.

RBI governor Shaktikanta Das says second COVID-19 wave one of key risks to India's economic recovery
India

RBI governor Shaktikanta Das says second COVID-19 wave one of key risks to India's economic recovery

Shashanka Bhide, a member of the Monetary Policy Committee, also said uncertainties relating to COVID-19 will impact growth and inflation scenarios in the next two to three quarters

RBI Assistant 2019 Main Examination to be held on 22 November; for exam centre change, other details check rbi.org.in
India

RBI Assistant 2019 Main Examination to be held on 22 November; for exam centre change, other details check rbi.org.in

The recruitment drive is carried out to fill 926 vacancies of Assistants in various offices of the RBI. Candidates who qualify the Mains examination will be called for a Language Proficiency Test