Moody’s raises India’s FY27 growth forecast to 7%
Mint - Economy · Published 11 November 2026 · Last updated
Moody’s Ratings raised India’s 2026-27 economic growth forecast to 7% from 6.5%, citing resilient domestic consumption, improving private investment dynamics, and strong macroeconomic fundamentals.
Key points
- Moody’s Ratings released its Global Macro Outlook 2027-28 on 11 November 2026, revising India’s growth forecast for 2026-27 to 7% from 6.5%.
- The upgrade follows a similar decision by the World Bank, which in October raised its FY27 growth forecast for India to 7.1% from 6.6%.
- Other institutions including the Asian Development Bank (ADB), S&P, and OECD have also revised their current financial year growth projections to 7% or higher.
- Moody’s expects India to sustain medium-term growth close to 7% in both 2027 and 2028, supported by potential private investment booms.
- High-frequency indicators reveal robust capital goods production and imports, industrial credit growth, and rising capacity utilization across sectors.
- Net Foreign Direct Investment (FDI) inflows into India rose to $13.8 billion during April-August 2026-27, compared to $9.6 billion in the previous year.
- The Reserve Bank of India (RBI) reported net FDI inflows of $3.3 billion in August 2026, reversing a net outflow of $103 million from the same month last year.
- Moody’s highlighted broad-based economic activity, marked by double-digit year-on-year growth in GST revenue, vehicle sales, and merchandise exports.
- The agency projects retail inflation to average 4.5% in 2026, easing to 4.3% in 2027 and 4.0% in 2028, though near-term price pressures persist.
- A Mint poll of 15 economists projected India's retail inflation for October 2026 to hit 6.0%, rising from 5.5% in September.
Background
- India’s economy previously expanded by 7.8% year-on-year in the April-June quarter of 2026-27, significantly exceeding market expectations.
- The Indian corporate and banking sectors underwent years of balance-sheet repair, setting the stage for a potential new private investment cycle.
- International rating agencies including Fitch previously pegged India's growth estimate at 6.9%, while the OECD had projected growth of 7.1% in its earlier updates.
Prelims facts and Mains angle for this issue are in the full SWAदेSH note.
Original report: Mint - Economy