Subbaraman said the year has started with several major developments compressed into a short period, but financial markets have stabilised after early volatility linked to geopolitics and central bank concerns.
“The Nomura view is actually a very constructive and positive one,” he said.
Nomura’s base case sees global growth at around 3% or slightly higher this year, led by the US among developed markets and India in emerging economies. Subbaraman said geopolitical risks are likely to remain in the background and are not expected to disrupt markets in a major way.
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Artificial intelligence (AI) remains a key focus for the firm’s outlook. Subbaraman said AI investment and adoption are expected to continue at scale, supporting productivity and corporate spending across sectors.
He also expects the US Federal Reserve to cut interest rates further, even as political pressure on the central bank increases. “We think Fed independence will be compromised a little bit, but not substantially,” he said, adding that US institutions remain strong.
On financial markets, Subbaraman said the environment of strong growth, easing rates and rising productivity could remain supportive for stocks, though valuations are already high.
Turning to India, Subbaraman said the recent weakness in the rupee does not reflect the country’s underlying economic strength. He described India as one of Nomura’s preferred economies for 2026, supported by low inflation, steady reforms and strong growth.
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Inflation in India is now structurally lower, he said, with core inflation near 2.5% after excluding gold and silver. He attributed this to monetary discipline, fiscal management and reforms such as goods and services tax (GST), digitalisation and wider foreign investment access.
Nomura expects the rupee to recover modestly by the end of the year. Subbaraman said the firm sees the dollar-rupee rate at around 90 by December, implying some appreciation from current levels.
“If we are now in a new regime of low inflation, there is no reason why the rupee has to continue to depreciate,” he said.
For the full interview, watch the accompanying video
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