Moody's Ratings indicated that the Indian economy is projected to grow by 6.6 percent in the current fiscal year. It noted that strong credit demand and robust economic growth would bolster the profitability of the non-bank finance companies (NBFCs) sector.

Moody's Ratings anticipated that India's economy would expand by 6.6 percent in the year ending March 2025 (FY25) and by 6.2 percent in the subsequent year. This growth is expected to lead to substantial loan growth at NBFCs, offsetting the effects of rising funding costs on their profitability.

The Indian economy was estimated to have grown by 8 percent in the 2023-24 fiscal year.

Moody's stated that despite rising funding costs for NBFCs in India, strong credit demand driven by the country's robust economic growth would support the sector's profitability. Additionally, favourable economic conditions were expected to help NBFCs maintain their asset quality, even as increasing interest rates raise the debt burdens of their customers.

Regarding India's growth prediction, Moody's forecast for FY25 GDP growth was lower than the projections made by the Reserve Bank of India (RBI) and other agencies, but aligned with Deloitte's forecast.

The RBI had projected a 7 percent growth rate for the Indian economy in the current fiscal year. Both the Asian Development Bank (ADB) and Fitch Ratings had estimated a 7 percent growth, while S&P Global Ratings and Morgan Stanley had expected a growth rate of 6.8 percent.