Moody’s Ratings has raised its forecast for India’s real GDP growth in the financial year 2026-27 to 7%, up from its earlier estimate of 6%. The ratings agency said the revision reflects the Indian economy’s stronger-than-expected performance and resilience despite global uncertainties, including the ongoing conflict in the Middle East.
Strong Consumption and Investment Support Growth
According to Moody’s, stronger private consumption, continued public infrastructure spending, robust investment and sustained growth in the services sector have supported the Indian economy. India’s real GDP growth reached 8.2% year-on-year in the first half of calendar 2026, compared with 7.3% for the full year in 2025. The agency also expects private-sector investment to improve further.
Moody’s said India is expected to continue growing faster than other G20 economies. However, it also warned that risks remain. Higher global energy prices could increase inflation, while El Niño-related disruptions may push up food prices and affect consumer spending. Higher energy and fertiliser import costs, weaker external demand and lower remittances from West Asia could also put pressure on economic growth.
Despite these risks, Moody’s has retained India’s Baa3 sovereign rating with a stable outlook. The agency said India’s large and diversified economy, strong domestic demand and foreign exchange reserves provide buffers against external shocks.
