Moody’s raises India FY27 growth forecast to 7% from 6% on resilient economy, stronger investment

Moody's has upgraded its forecast for India's real GDP growth in fiscal 2026-27 to 7% from the previous 6%, citing the country's resilient economy despite the conflict in the Middle East. The ratings agency attributes this upward revision to stronger private consumption, robust gross fixed capital formation, sustained public infrastructure spending, a revival in private investment, and sustained strength in services.

India's economy grew 8.2% year-on-year in the first half of 2026, compared to 7.3% in the full year of 2025.

This revised forecast surpasses predictions from other major institutions, including the International Monetary Fund (IMF), which projected 6.4% growth for FY27 in its July World Economic Outlook update, and S&P Global Ratings, which forecasted 6.6% growth in June. The Reserve Bank of India (RBI) had also lowered its FY27 growth forecast to 6.6% in June from 6.9%.

Moody's highlights private consumption and robust gross fixed capital formation as key drivers of the more optimistic outlook. The agency anticipates private-sector investment to pick up, adding another growth catalyst. Strong services activity further bolsters India's economic momentum.

Despite the upgrade, Moody's notes that India's high government debt, weak debt affordability, and low per capita income remain concerns. The ratings agency maintains India's Baa3 long-term issuer rating with a stable outlook.