October 28, 2024: Indian media reports — 'India has entered a phase of cyclical growth slowdown'

Indian media report: On October 28, Japanese brokerage Nomura Securities stated that the Indian economy has entered a 'phase of cyclical growth slowdown,' and the Reserve Bank of India’s GDP growth forecast of 7.2% is 'overly optimistic.' The brokerage noted that its own GDP growth forecasts—6.7% for FY 2024–25 and 6.8% for FY 2026—face 'rising downside risks.' In a report, the brokerage stated: 'We believe the Indian economy has entered a phase of cyclical growth slowdown. Coincident and leading growth indicators suggest GDP growth will further decelerate, and the RBI’s 7.2% forecast for FY 2025 is overly optimistic.' Earlier this month, the Reserve Bank of India maintained its FY 2025 growth forecast at 7.2%, despite some observers publishing lower growth estimates. Nomura Securities noted a recent weakening in urban consumption indicators in India, citing declining passenger vehicle sales, slowing air passenger traffic, and fast-moving consumer goods (FMCG) companies reporting weak urban demand. The brokerage added: 'We believe weak urban demand may persist.' Nomura also reported that Indian firms are cutting payroll expenses, noting that, based on data disclosed so far, real wage expenditures by listed companies declined by 0.8% in the September quarter after inflation adjustment.

Can India’s economy withstand the market’s 'heavy love' in 2024? Two critical 'singularities' exist.

Although pandemic-era excess savings have been largely exhausted, urban consumption in India has remained robust thus far in FY 2023–24. We attribute this partly to corporate wage growth (particularly in urban areas) and rising leverage (personal loans grew 18.2% year-on-year as of September 2023). Conversely, rural demand recovery remains concerning due to weather uncertainty, sluggish wage growth among low-income groups and rural populations, and government supply-side measures. Bhaskar Chakravorti, Dean of Global Business at The Fletcher School, Tufts University, observed in an article that while aggregate national consumption growth in India appears strong, its economic benefits are highly unequal. This imbalance is being exacerbated by divisive politics—heightening future volatility and casting doubt on the sustainability of consumption growth: The top 10% of India’s wealthiest individuals hold 77% of the nation’s wealth; medical expenses alone push nearly two people into poverty every second. India’s population density—one of the highest in the world—intensifies the zero-sum nature of resource allocation and environmental stress. Regional imbalances—where southern and western India grow 12% faster than northern and eastern India—are projected to widen over time. Layered atop this are linguistic fault lines, potentially giving rise to new inter-regional tensions. How India’s government manages these challenges will be a crucial test of its capacity. Can capital expenditure carry the burden going forward? Government capital expenditure has long served as a key catalyst for India’s economic growth. WallStreetCN noted that in the FY 2023–24 budget, the Indian government projected a sharp 33% increase in capital investment spending—to ₹10 trillion (approximately $120 billion)—marking the third consecutive year of growth and more than doubling the level seen in FY 2019. Chakravorti pointed out that India’s dilapidated and inefficient infrastructure has long constrained its economic growth. To address this longstanding structural weakness, the government has significantly ramped up capital spending on infrastructure. It has announced an infrastructure project plan covering FY 2019–2025, with a total value of approximately $2 trillion: Infrastructure investment results are already evident: India adds 10,000 kilometers of highways annually. Since 2014, the number of airports has doubled, and upgraded rail systems are delivering new, efficient 'freight corridors' linking India’s economic centers. Moreover, one of the most notable transformations has occurred in digital infrastructure. With 881.25 million internet users, India has built a 'digital public infrastructure'—studied by other countries—that enables broader, more convenient access to public services and credit. Regarding capital expenditure, the Indian government aims for the private sector to contribute roughly 22% of funding, targeting sectors including roads, railways, urban development and housing, energy, and irrigation.

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India's Godrej Consumer Expects High-Teens Revenue Growth in Second Quarter

India's Godrej Consumer Expects High-Teens Revenue Growth in Second Quarter

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