Banking stocks are set to shine. In fact, RBI is expected to cut interest rates in October. Brokerage firm Nomura has said that the RBI may cut the repo rate by 0.75 percent this fiscal. It may start cutting interest rates in October. It will affect the banks. A fall in interest rates will increase the demand for loans. Nomura has said that retail inflation is slowing. Retail inflation eased to 3.54 percent in July. Which is the lowest in last five years.
GDP growth may remain subdued in the second and third quarters
Nomura has said that GDP growth is slowing down along with inflation. GDP growth has slowed to 7.8 percent in the first quarter of this fiscal. It was 8.6 percent in the March quarter. Nomura said GDP growth is good despite the slowdown. The brokerage firm said GDP growth may slow in the second quarter and the third quarter due to weaker passenger car sales, slower corporate earnings growth and lower exports.
GDP growth is expected to be above 7% in FY26
The brokerage firm said demand in rural areas could pick up if monsoon rains are good. At present business is sluggish in rural areas. People's income is also decreasing. Nomura says there could be trouble if private consumption and private capital expenditure do not pick up. Increase in government spending has played a major role in economic growth. Nomura has forecast good growth for India in the medium term. He has said that the health of the economy is good. If the reform process continues, GDP growth will be supported. It may remain around 7 percent. GDP growth is estimated at 6.9 percent in FY25 and 7.2 percent in FY26.
America has reduced the interest rate in September
Experts say retail inflation has dipped below 4 percent in July. This is good news for the economy. This has increased the possibility of reduction in interest rates. On the other hand, the Federal Reserve in America is also likely to cut interest rates in September. If the Federal Reserve decides to cut interest rates next month, it will increase the chances of a rate hike in India in October. A fall in interest rates will increase the demand for loans. Credit growth is already good.
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