Moody’s projects India’s GDP to grow 6.4% in FY’27, fastest among G20 economies

Moody's forecasts India's GDP growth at 6.4% for FY'27, leading G20 economies amid strong banking conditions and reforms.

Moody's Ratings on Monday (February 9, 2026) projected India's GDP to grow at 6.4% in the next fiscal, the fastest pace among G-20 economies, driven by strong domestic consumption, policy measures, and a stable banking system.

In its banking system outlook report, Moody's said their asset quality will remain resilient, with some stress among micro, small and medium enterprises (MSMEs). Regardless, banks have sufficient reserves to absorb loan losses, it said.

The operating environment for banks will remain strong in 2026, supported by robust macroeconomic conditions and structural reforms, it said.

"We forecast India's real GDP will grow 6.4% for fiscal 2026-27, the fastest pace among G-20 economies, driven by strong domestic consumption and policy measures.

"The rationalization of the goods and services tax (GST) in September 2025 and an earlier increase in personal income tax thresholds will help improve affordability for consumers and support consumption-led growth," Moody's said.

The FY'27 GDP growth estimates by Moody's are lower than the 6.8-7.2% range projected by the Finance Ministry's Economic Survey tabled in Parliament last month.