Indian economy poised for 6.5% growth through 2027: Moody's Ratings

Moody’s Ratings said on Thursday that India’s economy is expected to grow by around 6.5 per cent through 2027. The agency kept its forecast for gross domestic product (GDP) growth at 6.4 per cent in 2026 and 6.5 per cent in 2027.

 

According to Moody’s, India’s growth will continue to be strong because of heavy investment in infrastructure, rising consumer spending, and diversified exports, even though private companies are still cautious about spending.

 

In its report 'Global Macro 2026: Growth will be steady but subdued in 2026,' the ratings agency said that India’s economy has remained strong despite global challenges and high US tariffs on some goods. 

 

 

The US imposed 50 per cent tariffs on Indian imports, including a 25 per cent penalty for buying Russian crude, starting August 27. US President Donald Trump recently suggested that the two countries are working together and may reach a deal soon.  

Central banks taking different approaches

Moody's also highlighted that global central banks are following different monetary policies. "The US Federal Reserve is easing its policy because of labour concerns, while other central banks are being more cautious. In emerging markets, China and Indonesia are cutting rates, but India’s Reserve Bank (RBI) is keeping its policy unchanged," it noted.

Global risks and uncertainties

Moody's said that there are several risks ahead, including geopolitical tensions, trade disruptions, and unstable financial markets. In its report, the ratings agency said, "Global growth will likely remain steady but subdued, with advanced economies growing modestly and emerging markets mostly maintaining stronger momentum."

 

"On trade, the possibility of China and the US decoupling has increased with rising restrictions and uncertainty, but other global economies could strengthen their relationships. Outlooks vary widely across G-20 economies," Moody's said. On the positive side, new technologies may boost productivity but could also disrupt jobs and industries.

US economy strong but slowing

Noting that the US economy remains strong, the ratings agency said that it is starting to slow down. Explaining the reason behind revising the US GDP growth upward, Moody's said, "Hiring and income growth have become weaker, showing signs of a late-stage business cycle. However, consumer spending and investments in artificial intelligence (AI) continue to support growth."

China's economy may slow to 4% by 2027

The agency further added that China’s economy is expected to grow around 5 per cent in 2025, helped by government stimulus and strong exports. "But growth could slow to 4.2 per cent by 2027. The domestic economy remains weak, with low consumer spending, limited corporate borrowing, and a drop in infrastructure investment," it said.