Nomura forecasts India’s 2026/27 fiscal deficit target of 4.3% could deviate by
about 20bp (0.2pp) under its baseline. It expects the Reserve Bank of India to
refrain from raising rates through the end of next year. Nomura says fiscal
risks have eased since the peak of Iran-related tensions but still anticipate
the ~0.2pp miss in the baseline scenario. Nomura projects FY growth at 6.6%;
stronger Apr–Jun activity could lift GDP above that. Market sentiment has
improved versus last year—greater confidence in growth, fiscal metrics and
current-account resilience, and reduced concerns about US trade friction. Some
supply-side pressure is emerging but Nomura sees no sign of broad-based
inflation.
