Nomura, a Japanese Conglomerate brokerage firm, today said India's GDP growth to be at 5.6 per cent in the current fiscal year, which is a touch lower than the consensus estimate of 6 per cent.
According to Nomura India's recovery will be very gradual and can last over a period of 12-18 months, as the growth is bottoming out and is at an inflection point. The firm estimates the growth rate to pick up to 5.6 per cent in FY14.
Nomura also said, the headline inflation will get into comfort zone during the fiscal which in turn cool down the consumer price inflation (CPI) to 8 per cent by the end of the fiscal as pressure on the food front ease, against 9 per cent now.
The firm blamed RBI for cutting rates and cited it as one of the reason for the dip in growth. Meanwhile the firm expects more cuts up to 0.50 percent by December.
It also expects that the central bank will undertake liquidity infusing measures like open market operations or government bond buybacks and cut the cash reserve ratio. RBI will do OMOs of Rs 1.2-1.3 trillion during the fiscal and cut the CRR by 0.25 per cent at its upcoming mid-quarter review on June 17, it said.
Recent fall in the prices of commodities may ease the current account deficit (CAD) to 4.3 percent for FY14 from the previous fiscal, which is intend to be 5 percent.
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