New Delhi, July 3 : Driven by steady growth and low, underlying inflation, India’s macroeconomic fundamentals are expected to remain strong in the second half of FY25, global brokerage firm Nomura has said.

Nomura expects a decline in India's consumer price index from 5.7 per cent at the end of FY24 to 4.8 per cent in the first quarter of the current fiscal (FY25), calling the low, underlying inflation a standout in the global context of “sticky inflation”.

Food inflation will moderate due to the shift to La Nina, ample rice stocks and increased pulse production, according to the global brokerage firm.

In a note, Nomura analysts also anticipated continued focus on capital expenditure and fiscal consolidation in the upcoming Union budget.

The brokerage is constructive on domestic sectors, such as manufacturing or investment themes over consumption.

Nomura said in an earlier note that the Union Budget is likely to highlight the policy direction, “which we expect to remain largely unchanged”.

“The government is likely to pursue fiscal consolidation and prioritise investments/capital expenditure," said the brokerage firm.

According to Nomura, reforms in India have survived the test of politics and “we expect the government to continue the pace of governance and administrative reforms, leaving states to work around the more intractable reforms around land and labour.”

India’s economic fundamentals remain strong and the country's growth prospects, inflation dynamics, current account status, and fiscal progress are "all encouraging”, according to reports.