Moody's Raises India's GDP Growth Forecast to 7% for FY2026-27

Moody's Ratings has raised India's real GDP growth forecast for FY2026-27 to 7%, up from 6%, citing strong private consumption, public infrastructure spending, robust investment, and services sector growth. India's GDP grew 8.2% year-on-year in the first half of 2026. The agency retained India's Baa3 sovereign rating with a stable outlook while noting risks from global energy prices, El Niño disruptions, and lower remittances from West Asia.

Moody's Ratings has revised its projection for India's real GDP expansion in the 2026-27 fiscal year upward to 7%, compared with a previous estimate of 6%. The credit rating agency attributed the upgrade to the Indian economy's better-than-anticipated growth and its ability to withstand external pressures, among them the continuing hostilities in the Middle East. Moody's attributed India's economic resilience to household spending momentum, ongoing government outlays on infrastructure, healthy investment levels, and steady expansion within the services industry. The country's real GDP expanded by 8.2% on an annual basis during the opening half of calendar year 2026, up from 7.3% recorded across the whole of 2025. Private-sector investment is forecast to strengthen further, according to the organisation. According to Moody's, India's economic expansion is projected to outpace that of other G20 nations. Nonetheless, certain risks were found to persist. Elevated international energy costs have the potential to drive up inflation, while weather disruptions linked to El Niño may place upward pressure on food prices and weigh on household expenditure. Elevated costs for energy and fertiliser imports, reduced overseas demand, and declining remittances from the Middle East region are among the factors that may weigh on economic expansion. Moody's has nonetheless kept its Baa3 sovereign rating for India, maintaining a stable outlook. The organisation noted that India's broad and varied economic base, robust consumer activity, and currency reserves act as a cushion against volatility from abroad.

Moody's Raises India's GDP Growth Forecast to 7% for FY2026-27

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Moody's Raises India's GDP Growth Forecast to 7% for FY2026-27

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