Moody’s Forecasts India as Fastest-Growing G-20 Economy Through 2027

According to the latest global economic outlook by Moody’s, India is projected to remain the fastest-growing economy among G-20 nations through 2027. The country’s robust economic trajectory is attributed to strong domestic demand, stable monetary policy, healthy capital inflows, and resilient exports—all of which continue to drive growth despite global headwinds. This forecast strengthens India’s image as a key engine of global economic growth, even as advanced economies and some emerging markets face slowing momentum.

Moody’s Forecast for India (2025–2027)

The rating agency outlined a positive growth trajectory for India over the next three years,

• 2025 GDP growth: 7.0%
• 2026 GDP growth: 6.4%
• 2027 GDP growth: 6.5%

This sustained expansion is driven by domestic consumption, infrastructure investment, and diversified exports. India’s economy continues to benefit from sound fiscal management and structural reforms that support long-term resilience.

Domestic Strength: Key Drivers of Growth

1. Strong Consumption Demand

Rising disposable incomes, expanding urbanization, and stable employment trends are fuelling robust household consumption, which remains the backbone of India’s economy.

2. Public Infrastructure Spending

Government-led capital expenditure, particularly in transport, energy, and digital infrastructure, continues to create multiplier effects across sectors, boosting demand and job creation.

3. Export Diversification

India’s exporters have successfully diversified markets and mitigated risks from geopolitical developments, including higher US tariffs on select goods. Despite a decline in exports to the US, India recorded a 6.75% rise in total exports in September, showcasing adaptability.

Policy Support: RBI’s Role in Economic Stability

Moody’s acknowledged that India’s monetary policy remains neutral to accommodative, supported by the Reserve Bank of India (RBI) maintaining a steady repo rate and managing inflation within target levels.

The policy stance has helped,

• Maintain domestic liquidity
• Attract strong foreign capital inflows
• Preserve financial market stability despite external uncertainties
• These conditions have enhanced investor confidence and kept borrowing costs manageable for businesses and consumers.

Global Context: How India Compares

Moody’s also projected,

• Global GDP growth at 2.5–2.6% in 2026–2027
• Advanced economies like the US and Europe growing at around 1.5%
• Emerging markets expanding near 4%
• Within this landscape, India stands out as a high-growth outlier, significantly outpacing both advanced and developing peers.

Static Facts

• India’s GDP Growth Forecast by Moody’s,
• 2025: 7%
• 2026: 6.4%
• 2027: 6.5%
• Fastest-growing economy in: G-20
• RBI’s policy stance: Neutral to easy, with steady repo rate
• Export growth (September 2025): 6.75%