India’s economy is expected to remain on a strong growth trajectory in FY2026–27, with real GDP projected to expand by 6.4%, the fastest among G-20 nations, according to Moody’s. The global rating agency said steady growth will support financial stability and sustain credit demand across sectors.
Moody’s noted that robust domestic demand, improving investment activity and stable macroeconomic conditions are likely to lift business confidence and encourage borrowing. Structural reforms, including GST rationalization and income tax cuts, are expected to boost consumption, while a stable monetary policy stance should keep financial conditions supportive. The Reserve Bank of India has also expressed optimism, raising its early growth estimates for FY27. The central bank now expects GDP growth of 6.9% in the first quarter and 7.0% in the second quarter, citing resilience in consumption and investment.
Moody’s said strong economic conditions should keep asset quality stable and corporate balance sheets resilient. However, it cautioned that rising competition for deposits could pose funding challenges for banks.
