'India set to be among fastest-growing economies with 6.5% expansion in 2027': Moody's

The Indian economy is expected to remain among the world's fastest growing, with growth projected around 6.5% in 2026 and 2027, supported by strong infrastructure spending and household consumption, according to Moody's Ratings.

While infrastructure investment and domestic demand continue to drive India's growth, the private sector remains cautious about capital spending, the ratings agency said in its Global Macro Outlook 2026-27.

"We expect Brazil and India-the fastest-growing G-20 economy-will grow at 2.0% and 6.5%, respectively, through 2027, supported by domestic and export diversification," it added.


The agency kept India's gross domestic product (GDP) growth unchanged at 7% for 2025 and projected 6.4% for 2026 and 6.5% for 2027.

The economy expanded 7.8% in the April-June period and 6.5% in FY25.

Globally, Moody's Ratings forecast economic growth to range between 2.5% and 2.6% in 2026 and 2027, compared with 2.6% in 2025 and 2.9% in 2024. "Global growth will likely remain steady but subdued with advanced economies growing modestly and emerging markets mostly maintaining stronger momentum," it said.

Among major economies, the US is forecast to grow 1.8% in 2026 and 1.9% in 2027, while China's GDP will expand by 4.5% and 4.2% over the same period.

The US imposed a 50% tariff on Indian goods, which includes a 25% penalty for importing Russian oil.

Despite the headwinds, Indian exporters have succeeded in redirecting exports, with shipments rising 6.8% in September, while they fell 11.9% to the US, the report noted.

It also highlighted the growing momentum in trade partnerships outside US-China. India and the UK have finalised a trade agreement and the country is in talks with the EU.

Inflation in India is expected to average around 3.5% in 2026 and 4% in 2027. It averaged at 2.5% between January and October this year.