India’s economy set to grow at 6.5% through 2027: Moody’s

India’s economy is set to grow at 6.5 per cent through 2027, said Moody’s Ratings on Thursday, maintaining its outlook for India’s gross domestic product (GDP) growth at 6.4 per cent in 2026 and 6.5 per cent in 2027.

India is expected to weather Trump’s tariff turbulence with diversified exports and will remain the fastest-growing economy among the G-20 nations over the next two years.

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In its Global Macro Outlook 2026-27 report, Moody’s Ratings said, “Indian exporters, facing 50 per cent US tariffs on some products, have succeeded in redirecting exports; its overall exports climbed 6.75 per cent in September even as shipments to the US dropped 11.9 per cent .”

It further attributed India’s stability to a neutral-to-easy monetary policy stance and low inflation, which have kept domestic conditions supportive of growth.

“In India, the RBI held its repo rate steady in October, showing that it is cautious on policy with inflation subdued and growth strong,” the report said.

On the global GDP growth, Moody’s projected it to grow at around 2.5 -2.6 per cent in 2026 and 2027, reflecting steady but uneven expansion across regions.

Advanced economies are expected to grow about 1.5 per cent, while emerging markets, led by India, will expand close to 4 per cent .

“Policy divergence and trade shifts will shape a stable but mixed global growth outlook as economies adjust to post-pandemic and geopolitical realignments,” the report mentioned.

The United States is seeing slower but stable momentum, supported by modest consumer spending and AI-related investment and adoption.

Moody’s observed that “narrow credit spreads, robust equity markets, and ample funding liquidity have created benign financial conditions.” It added that fiscal stimulus, a more accommodative monetary policy, and regulatory easing could extend the US credit cycle into 2026, offsetting tariff and immigration pressures, though risks could rise as the cycle matures.

For Europe, Moody’s noted a modest improvement driven by employment gains, wage stability, and monetary policy easing by the European Central Bank. Investments in infrastructure and green technology, particularly Germany’s fiscal push in defence and public projects, are expected to support regional growth.

Meanwhile, China’s economy is on track to grow 5 per cent in 2025, supported by government stimulus and strong exports, as per Moody’s, with domestic fundamentals remaining soft, with uneven consumption, weak corporate lending, and shrinking fixed asset investment. However, it expects the real GDP growth to gradually slow to 4.2 per cent by 2027.