Moody’s Ratings on Wednesday said the Indian economy is expected to grow at a higher rate of 7 per cent in the current fiscal, led by broad-based economic momentum and energy supply shock resilience.
In its Global Macro Outlook 2027-28, Moody’s, however, said that near-term risks to growth persist as household consumption remains vulnerable to “intensifying and broadening price pressures”, with headline inflation close to the upper end of the Reserve Bank of India’s (RBI) 2-6 per cent target range, while a deficient southwest monsoon and strengthening El Nino conditions will weigh on agricultural output and rural demand.
“India’s broad-based economic momentum and demonstrated resilience to the energy supply shock warrant upward revisions to our 2026-27 growth forecasts to 7 per cent from 6.5 per cent,” it said.
Robust consumption, improving investment dynamics and strong macroeconomic fundamentals imply that the economy appears well positioned to sustain growth near 7 per cent over the medium term, Moody’s said.
A sustained private investment boom that materially boosts manufacturing, employment and productivity could lift growth rates above Moody’s baseline projections.
“With the RBI on track to raise rates further, tighter monetary policy could delay the recovery in private investment,” Moody’s added.
India has adjusted to the energy price shock better than previously assumed, helped by its ability to diversify crude and gas supplies and buffer consumers from the immediate price impact through state-backed oil marketing companies and tax cuts.
