Moody's India GDP Forecast

Moody's Ratings recently forecasted India's GDP to grow by 6.4% in fiscal year 2027 (FY27), making it the fastest among all G20 nations. This positive outlook highlights India's strong economic momentum despite global challenges.

Growth Drivers

India's growth will be fueled by steady domestic spending from households and businesses. Recent policy changes, like simplifying the Goods and Services Tax (GST) in September 2025 and raising personal income tax limits earlier, will make goods more affordable and boost consumer buying. A stable banking system and controlled inflation further support this expansion.

Comparison to Peers

India's 6.4% projection outpaces other G20 countries, positioning it as the top performer. This is slightly below India's own Economic Survey estimate of 6.8%-7.2% for FY27 but matches recent trends after 7.4% growth expected this fiscal.

Banking Sector Strength

Banks in India will see loan growth rise to 11%-13% in FY27 from 10.6% so far this year, backed by healthy corporate profits and reserves to handle any small business stress. Overall asset quality remains solid, with strong capital and liquidity levels.​

Future Policy Outlook

The Reserve Bank of India may cut interest rates further in FY27 if growth slows slightly, keeping conditions supportive. These factors combined ensure India's economy stays resilient and leads global growth.​