moody’s ratings Said on Tuesday that the Indian economy is expected to grow at the rate of 6.6 percent in the current financial year. The rating agency said strong credit demand coupled with faster economic growth will support the profitability of the NBFC sector. Moody’s Ratings said that we expect India’s economy to grow at 6.6 percent in the fiscal year ending March 2025 and 6.2 percent in the next fiscal year. This will lead to stronger credit growth in NBFCs, thereby reducing the impact of rising funding costs on their profitability.
Fear of increasing debt burden on customers
The Indian economy is expected to grow at the rate of eight percent in the financial year 2023-24. In a comment on non-banking financial companies, Moody’s said strong economic conditions will help them maintain asset quality. However, an increase in interest rates may increase the debt burden on their customers. The commentary said the cost of funding for non-banking financial companies (NBFCs) in India is rising, but credit demand driven by the country’s strong economic growth will support the profitability of the sector.
More chances of reaching eight percent
Chief Economic Advisor V. Ananth Nageswaran had recently said that the gross domestic product (GDP) growth rate is expected to reach eight per cent in the financial year 2023-24 based on the strong growth recorded in the three quarters of the financial year ending March 31, 2024. There is a lot of possibility of reaching there. India’s gross domestic product (GDP) grew by 8.4 percent in the third quarter ending December 2023. GDP growth in the second quarter was 7.6 percent while in the first quarter it was 7.8 percent. The IMF has projected a growth rate of 7.8 per cent for the financial year 2023-24, he said at an event organized by NCAER here. If you look at the pace of growth in the first three quarters, clearly the chances of the growth rate reaching eight per cent are quite high.
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