India’s economy is set to outpace its G20 peers once again, according to Moody’s Ratings, which projects a solid 6.4 percent GDP growth for FY 2026-27. This optimistic outlook is fueled by vigorous domestic demand and proactive policy support, cementing India’s position as the world’s growth engine.
The report paints a positive picture of the banking system, noting its favorable outlook and ample provisioning against bad loans. This financial resilience provides a strong foundation for sustained expansion.
Key stimulants include the GST dip in September 2025 and earlier income tax reductions, which have enhanced disposable incomes and sparked a consumption boom across urban and rural markets alike.
The RBI is expected to hold off on additional easing measures unless economic activity shows unmistakable deceleration. Controlled inflation levels grant the central bank the room to maneuver effectively.
Corporate India remains a bright spot, with robust balance sheets and rising profits ensuring high-quality loan portfolios. Credit expansion is forecasted to hit 11.13 percent in FY27, surpassing the current FY26 figure of 10.6 percent, though asset recovery may moderate after aggressive resolutions.
Moody’s forecast, though conservative compared to the government’s 6.8-7.2 percent range, aligns with expectations of 7.4 percent growth this year. India’s growth story continues to captivate global investors, promising stability and opportunity.