Moody’s Ratings sees India’s real GDP growing 7% in fiscal 2026-27, citing resilient consumption and signs of a possible investment recovery as inflation and monetary policy threaten momentum.
The fiscal year runs from April 2026 through March 2027. Moody’s November outlook compares its 7% forecast with an earlier 6.5% estimate. Reuters reported that Moody’s September sovereign review had raised its FY27 forecast to 7% from 6%. The reports do not reconcile the difference. India’s Ministry of Finance put its FY27 outlook at 7.3% in October, in a separate growth outlook.
Moody’s investment case draws on industrial credit growth, capital-goods production and imports, and the share of production capacity in use. The agency views these measures as possible signs of renewed business spending after years of corporate and banking-sector balance-sheet repair. It said a durable investment upswing could take growth above its baseline if manufacturing, employment and productivity benefit.
The agency also said diversified crude and gas supplies, tax cuts and support from state-backed oil marketing companies helped cushion consumers from the energy-price shock.
Inflation is another risk to household demand. India’s Ministry of Statistics and Programme Implementation reported provisional consumer price inflation of 5.54% year over year in September 2026, near the top of the Reserve Bank of India’s 2%-6% tolerance range. Food inflation was 7.74%.
Moody’s also flagged monsoon-related risks as a potential drag on household demand and investment. The Reserve Bank of India (RBI) raised its policy repo rate by 25 basis points to 5.50% in October and projected FY27 growth of 7.1%. Moody’s warned that further rate increases could delay a private investment recovery. The RBI’s next policy meeting is scheduled for Dec. 2-4.
