India's GDP to expand at 6.6% in FY25; will fuel NBFCs' growth: Moody's.

Economy Business

Moody's Ratings on Tuesday said the Indian economy is projected to expand 6.6 per cent in the current fiscal year and said strong credit demand fuelled by robust economic growth will support the NBFC sector's profitability. "We expect India's economy to expand 6.6 per cent in the year ended March 2025 (FY25) and 6.2 per cent the following year, and this will lead to robust loan growth at NBFCs, mitigating the impact of rising funding costs on their profitability," Moody's Ratings said.In a commentary on the non-banking finance companies, Moody's said robust economic conditions will help them preserve their asset quality even as rise in interest rates increase the debt burdens of their customers.Aggregate year-on-year loan growth at NBFCs accelerated to 20.8 per cent in September 2023 from 10.8 per cent a year earlier, driven by demand for retail loans, including financing for housing and automobiles.


      Indian Economy Projection: Moody's predicts a 6.6% expansion for the Indian economy in FY25, supporting robust credit demand and profitability in the NBFC sector.

      NBFC Sector Profitability: Strong economic growth is expected to fuel credit demand, aiding NBFCs' profitability despite rising funding costs.

      Asset Quality Preservation: Moody's anticipates that robust economic conditions will help NBFCs maintain asset quality, even amidst increasing interest rates impacting customer debt burdens.

 

     


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