<h1>Moody's Projects India's GDP Growth to Surpass 6.5% in FY 2025-26, Boosted by Government Spending and Tax Cuts.</h1> Moody's Ratings forecasts India's GDP growth to exceed 6.5% in FY 2025-26, up from 6.3% this year, driven by increased government capital expenditure, tax cuts, and interest rate reductions. While the banking sector's operating environment will remain favorable, asset quality may moderately decline, particularly in unsecured retail and small business loans. Despite this, banks' profitability is expected to remain adequate. India's economic growth, after a temporary slowdown in mid-2024, is anticipated to reaccelerate, supported by stable inflation rates and cautious monetary easing by the Reserve Bank of India amid global uncertainties. Loan growth is projected to slow to 11-13%.