Archive · 18 Sep 2026
Moody’s Raises India’s FY27 GDP Growth Forecast to 7%
Moody’s is an agency that studies economies and makes forecasts.
It now expects India’s economy to grow by 7% in the current financial year.
Its earlier forecast was 6%.
Moody’s said India has remained strong despite conflict in West Asia and other global problems.
Government data showed that India’s economy grew quickly in the April-June quarter.
However, higher oil and energy prices could make everyday goods more expensive.
Weather disruptions linked to El Niño could also raise food prices.
Moody’s said India still faces risks from weaker overseas demand and lower remittances.
Moody’s Ratings raised its forecast for India’s real GDP growth in fiscal 2026-27 to 7% from 6%.
The agency cited India’s economic resilience amid the ongoing West Asia conflict and broader geopolitical tensions.
India’s economy grew 7.8% in the April-June quarter of fiscal 2026-27, according to recently released government data.
Moody’s warned that higher energy prices could push average inflation above its 4.8% projection.
Potential risks include El Niño-related food-price pressures, weaker external demand, and reduced remittances from the Middle East.
- Who
- Moody’s Ratings and India’s economy.
- What
- Moody’s raised its real GDP growth forecast for India from 6% to 7%.
- When
- For fiscal 2026-27, which ends in March 2027; the announcement was made on Friday.
- Where
- India, with the review issued from New Delhi.
- Why
- Moody’s cited India’s resilience, stronger domestic demand, infrastructure investment, and sustained services-sector strength, while warning about inflation and external risks.
Growth Resilience
Economic Risks
India’s growth outlook
Growth Resilience
Moody’s raised its forecast because India has shown resilience, supported by private consumption, infrastructure investment, domestic demand, and services.
Economic Risks
Higher energy and fertiliser costs, weaker external demand, and lower remittances from the Middle East could weaken growth momentum.
Inflation prospects
Growth Resilience
Diversified crude-import sources, sizeable foreign-exchange reserves, and strong domestic demand provide buffers against external shocks.
Economic Risks
Crude prices above $100 per barrel and possible El Niño-related food disruptions could push inflation above Moody’s 4.8% projection.
Fiscal and debt outlook
Growth Resilience
Moody’s said gradually improving fiscal metrics, stronger nominal GDP growth, and tax-administration efforts support a stable outlook.
Economic Risks
Debt reduction is expected to be gradual, while elevated interest rates could constrain debt affordability.
- Revised growth forecast
- 7% real GDP growth
- Previous forecast
- 6% real GDP growth
- Forecast period
- Fiscal 2026-27, ending March 2027
- Quarterly growth
- 7.8% in April-June of fiscal 2026-27
- Inflation projection
- 4.8% annual average, though Moody’s said it could be exceeded
- Fiscal deficit target
- 4.3% of GDP in the current fiscal year, compared with 4.4% in fiscal 2025-26
- Sovereign rating
- India’s Baa3 rating has a stable outlook
