Indian economy projected to be the fastest growing among G20 countries
Global rating agency Moody’s on Monday released new projections for the Indian economy. According to Moody’s, India’s GDP could grow at a rate of 6.4% in the next fiscal year (2026-27).
Moody’s said this pace would be the fastest among the G20 group of major economies. The agency attributed this to strong domestic consumption, government policy decisions, and the country’s stable banking system.
Estimate lower than government and RBI estimates
Moody’s estimate is slightly lower than the projections of the Indian government and the Reserve Bank of India (RBI). The Economic Survey presented in Parliament last month projected a growth of 6.8% to 7.4% for the fiscal year 2027.
The Reserve Bank of India (RBI) also recently expressed optimism for approximately 7% growth in the first half of fiscal year 2027 during its monetary policy meeting.
Tax changes and GST to boost consumption
Moody’s report stated that changes to GST rules in September 2025 and the increase in personal income tax limits will leave more money in people’s pockets. This will increase demand in the market, leading to economic growth. The rating agency said in its banking system outlook report that the condition of Indian banks will remain strong.
RBI may continue to cut interest rates
Moody’s believes that inflation is now under control, so the Reserve Bank may continue to cut interest rates. However, this will depend on whether there are any signs of a slowdown in the economy.
The RBI has already cut interest rates by 1.25% in 2025, bringing the current repo rate to 5.25%.
