India Set to Lead G20 Growth at 6.5% Through 2027, Says Moody's
Moody's Ratings forecasts India to maintain its position as the fastest-growing G20 economy, with a 6.5% growth rate expected through 2027. This growth is attributed to robust infrastructure investment, strong consumer demand, and diversified exports. Despite facing trade challenges, including 50% U.S. tariffs on certain products, Indian exporters have shown resilience with overall export growth of 6.75% in September. The RBI has kept repo rates unchanged, supported by subdued inflation and strong economic growth. Strong international capital inflows and positive investor sentiment further bolster India's economic stability. Globally, Moody's projects GDP growth of 2.50%-2.60% for 2026-2027, with emerging markets growing at ~4.00%.
*this image is generated using AI for illustrative purposes only.
Moody's Ratings has projected India to maintain its position as the fastest-growing G20 economy, with a robust growth rate of 6.5% expected to continue through 2027. This optimistic forecast comes despite global economic challenges and trade pressures.
Key Growth Drivers
According to Moody's, India's strong economic performance is attributed to several factors:
- Robust infrastructure investment
- Strong consumer demand
- Diversified exports
Export Resilience Amid Tariff Challenges
Despite facing significant trade hurdles, including 50% U.S. tariffs on certain products, Indian exporters have shown remarkable resilience:
| Metric | Performance |
|---|---|
| Overall export growth (September) | 6.75% |
| U.S. exports decline | 11.90% |
This data suggests that Indian exporters have successfully redirected shipments to alternative markets, maintaining growth despite adverse conditions.
Domestic Economic Landscape
The Reserve Bank of India (RBI) has maintained a steady monetary policy stance, keeping repo rates unchanged in October. This decision is supported by:
- Subdued inflation
- Strong economic growth
External Factors and Investment Climate
India's economic stability is further bolstered by:
- Strong international capital inflows
- Positive investor sentiment
These factors have helped cushion the impact of external shocks. However, private sector investment remains cautious.
Global Economic Outlook
Moody's global economic projections paint a broader picture:
| Year | Global GDP Growth | Advanced Economies | Emerging Markets |
|---|---|---|---|
| 2026-2027 | 2.50%-2.60% | ~1.50% | ~4.00% |
China's Growth Trajectory
Moody's forecasts for China's economic growth:
| Year | Projected Growth Rate |
|---|---|
| 2025 | 5.00% |
| 2027 | 4.20% |
European Economic Outlook
Europe is expected to experience a modest recovery, supported by:
- Employment gains
- ECB monetary easing
This comprehensive outlook by Moody's Ratings underscores India's strong economic position within the G20, highlighting its resilience in the face of global trade tensions and its potential for sustained growth in the coming years.
20
