Moody’s Sees India’s GDP Growing 6.4% In FY27, Fastest Among G20 Nations

India Projected To Lead G20 Growth

Moody’s said India’s real GDP is expected to grow 6.4% in fiscal year 2026-27, making it the fastest-growing economy among G20 nations. The projection is driven by sustained domestic consumption, supportive policy actions and continued macroeconomic stability.

The forecast is lower than the 6.8%-7.2% growth range projected by the Finance Ministry’s Economic Survey. Official estimates place India’s GDP growth at 7.4% in the current fiscal year, compared with 6.5% in 2024-25.

Banking System Outlook Remains Stable

In its banking system outlook, Moody’s said asset quality across banks is expected to remain resilient, although some stress may persist among micro, small and medium enterprises. It added that banks have sufficient buffers to absorb potential loan losses.

The operating environment for banks is expected to remain strong through 2026, supported by favourable macroeconomic conditions and ongoing structural reforms.

Policy Measures To Support Consumption

Moody’s said policy initiatives, including the rationalisation of the goods and services tax in September 2025 and the earlier increase in personal income tax thresholds, are likely to improve affordability and support consumption-led growth.

With inflation under control and growth momentum intact, Moody’s said further monetary easing by the Reserve Bank of India in FY27 would depend on signs of a slowdown in economic activity.

Credit Growth And Capital Position

Moody’s expects system-wide loan growth to accelerate slightly to 11%-13% in FY27, compared with 10.6% growth recorded so far in FY26. It said corporate loan quality is likely to remain healthy, supported by strong balance sheets and improved profitability among large companies.

The agency added that banks are expected to maintain strong capitalisation, stable funding and adequate liquidity, with loan growth broadly aligned with deposit growth.