Mumbai, Nov 5 (PTI) Japanese brokerage firm Nomura on Wednesday said the growth rate of festive consumption has been halved to 15 per cent in the current year.

Analysts at the brokerage attributed their findings to “rough estimates” and added that the same growth stood at 32% in 2023 and 88% in 2022.

“Anecdotal data suggests that retail sales (offline and online) have increased this holiday season, but overall growth rates are slower,” they said in a note.

Although festive demand remains stable in rural areas and tier 2 and 3 cities, demand in metro cities and industry is “weak”, leading to “mixed” overall festive consumption trends.

Last month, the Union Finance Ministry had said that urban demand was weak.

Nomura analysts said weddings in December are expected to provide a boost to festive sales.

“There are broadly two ways to assess the strength of festive demand. One is to sift through anecdotal evidence and compare trends with previous years. Another, in the case of conventional ‘hard’ data, is to aggregate economic activity over the September-December period and compare year-on-year, which helps iron out the “date effect” on growth rates,” he explains.

Based on anecdotal evidence, he cited expectations from the Confederation of All India Traders (CAIT) that retail sales growth would slow to 13.3 percent in 2024 from 36.4 percent the previous year, the growth in online sales and gold volumes falling even as sales increased. up.

On the “hard” data front, the brokerage said incoming data suggests stability, but there are fireworks.

It says automobile retail sales grew by 14 per cent after adjusting for the Shradh period, but on the wholesale side, passenger vehicles and MHCVs performed poorly in 2024.

A “cyclical slowdown in growth” is underway in the economy, he said, adding that the Reserve Bank of India’s estimate of 7.2 percent real GDP growth for FY25 appears “overly optimistic” and that there are “increasing downside risks” to its own projections of 6.7 percent. percent growth.