New Delhi is poised for robust economic expansion, with Moody’s Ratings forecasting a 6.4 percent real GDP growth for India in the financial year 2026-27. This projection positions India to maintain its lead as the fastest-growing major economy among G20 nations, driven primarily by resilient domestic consumption and supportive government policies.
The latest report from the American brokerage firm highlights the strength of India’s banking sector, which continues to exhibit a broadly favorable outlook. Banks are well-equipped with sufficient reserves to handle any non-performing assets, ensuring stability amid global uncertainties.
Recent fiscal measures have significantly boosted consumer spending power. The reduction in Goods and Services Tax (GST) collections in September 2025, coupled with prior income tax cuts, has invigorated household expenditure and propelled consumption-led growth.
Moody’s anticipates that the Reserve Bank of India (RBI) will adopt a cautious approach to monetary easing, implementing further policy relaxations only if clear signs of economic slowdown emerge. With inflation remaining under control, the central bank enjoys considerable flexibility in its decision-making.
Looking ahead, credit growth is expected to accelerate to 11.13 percent in FY27, up from 10.6 percent recorded so far in FY26. Strong balance sheets and improved profitability among large corporations will sustain the quality of corporate loans, even as recovery from stressed assets slows post-resolution.
While Moody’s estimate falls slightly below the Finance Ministry’s Economic Survey projection of 6.8-7.2 percent for FY27, it underscores India’s resilience. The current fiscal year is on track to achieve 7.4 percent growth, reinforcing the nation’s economic momentum in a challenging global landscape.