Daijiworld Media Network – New Delhi

New Delhi, Mar 13: Global rating agency Moody’s has projected India’s economic growth to exceed 6.5% in the fiscal year 2025-26, up from 6.3% in the current financial year, driven by increased government capital expenditure and a consumption boost from tax cuts and interest rate reductions.

In its latest report, Moody’s maintained a stable outlook for India’s banking sector, highlighting a favorable operating environment. However, it cautioned that asset quality may witness a moderate decline after years of improvement, particularly in unsecured retail loans, microfinance, and small business loans.

Despite potential stress in certain lending segments, Moody’s asserted that Indian banks’ profitability would remain adequate, backed by strong capital buffers and prudent risk management.

India’s strong economic momentum, coupled with policy support, is expected to sustain its position as one of the fastest-growing major economies, the report added.