India’s economy is expected to grow at 6.5% in FY25, mainly driven by the government’s capital expenditure push, softness in global commodity prices and “healthy” corporate performance, India Ratings and Research (Ind-Ra) said in a report.

The projection, however, is sharply lower than the Reserve Bank of India’s (RBI) forecast of 7% GDP growth next year. In FY24, the National Statistical Office has projected India’s economy to grow at 7.3%.

Despite the base effect, the sequential GDP growth indicates that the economic recovery is on track, said the report while adding that there are prospects of a new private corporate capex cycle in the next fiscal year.