Japanese brokerage Nomura on Monday said the Indian economy has entered a phase of "cyclical growth slowdown" and the Reserve Bank's estimate of 7.2 per cent GDP expansion is "overly optimistic".

       The brokerage said it sees "rising downside risks" to its GDP growth estimates of 6.7 per cent in the ongoing FY25 and 6.8 per cent in FY26.

       "We believe India's economy has entered a cyclical growth slowdown. Coincident and leading growth indicators point to a further moderation in GDP growth and the RBI's forecast of 7.2 per cent for FY25 is overly optimistic," the brokerage said in a note.

       The RBI maintained its FY25 growth estimate at 7.2 per cent earlier this month, even as some watchers have been coming out with lower numbers.

       Nomura said urban consumption indicators have been softening lately, and pointed to the slump in passenger vehicle sales, moderation in airline passenger traffic and FMCG companies flagging weak urban demand.

       "We believe this weakness in urban demand is likely to continue," the brokerage said.

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       Stating that companies are scaling down their salary outlays, the brokerage said real salary and wage expenditure of listed companies has moderated 0.8 per cent in the September quarter when adjusted for inflation if one were to go by the numbers disclosed till now.

       The same was 1.2 per cent in the June quarter, 2.5 per cent in FY24 and 10.8 per cent in FY23, the brokerage said, adding that this likely reflects a mix of weaker nominal salary growth and a leaner workforce.

       "The post-pandemic surge in pent-up demand has faded, monetary policy is tight and the RBI's macroprudential crackdown on unsecured, frothy credit is being reflected in the slowdown in personal loans and lending growth by non-banking finance companies," the brokerage said.

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