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Moody's Ratings has raised India's GDP growth forecasts to 7 per cent for the fiscal year ending March 2027 from its earlier projections of 6.5 per cent, citing strong domestic consumption, improving investment and the economy's resilience to higher global energy prices.
In its Global Macro Outlook 2027-28 report released, the ratings agency said India's economic growth is expected to remain near 7 per cent over the medium term, with sustained private investment potentially pushing growth even higher. "India's broad-based economic momentum and demonstrated resilience to the energy supply shock warrant upward revisions to our 2026-27 growth forecasts to 7% from 6.5%," Moody's said. The report added, "Robust consumption, improving investment dynamics and strong macroeconomic fundamentals imply that the economy appears well positioned to sustain growth near 7% over the medium term." Moody's has also projected India's GDP growth at 7 per cent in 2028. The agency said a sustained rise in private investment, particularly in manufacturing, could support employment and productivity, potentially lifting economic growth above its current projections. It noted that India has handled the global energy price shock better than previously expected, helped by its ability to diversify crude oil and gas supplies. According to the report, state-backed oil marketing companies and tax cuts have helped protect consumers from the immediate impact of higher fuel prices. Moody's also pointed to stronger capital goods production and imports, faster industrial credit growth and improving capacity utilisation as signs of a recovery in private investment. The report said these indicators "suggest that India may be at the cusp of a new private capex cycle after several years of corporate and banking-sector balance sheet repair." However, the agency cautioned that risks to growth remain, particularly from rising inflation, weaker agricultural output and higher interest rates. It said a deficient southwest monsoon and strengthening El Nio conditions could affect rural demand, while further monetary tightening by the Reserve Bank of India could delay the recovery in private investment. "With the RBI on track to raise rates further, tighter monetary policy could delay the recovery in private investment," Moody's said. (ANI)
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