Moody’s Projects India’s GDP Growth at 6.4% in FY27; Fastest Among G20 Nations

Moody’s Ratings has projected India’s gross domestic product growth at 6.4% in FY27, marking the fastest pace among G20 economies, supported by domestic demand, policy initiatives and a resilient banking sector. 

GDP Growth Projection for FY27 

According to the banking system outlook released on February 9, 2026, India’s real GDP is expected to grow at 6.4% in FY27. The projection places India ahead of other G20 economies in terms of growth rate, driven by consumption trends and recent policy changes. 

Comparison with Official Estimates 

The projected growth rate is lower than the 6.8% to 7.2% range estimated by the Finance Ministry in the Economic Survey presented in Parliament. Official estimates indicate that India is likely to record GDP growth of 7.4% in FY26, compared with 6.5% in FY25. 

Banking System and Asset Quality 

The report stated that asset quality within the banking system is expected to remain resilient, although some pressure may persist among micro, small and medium enterprises. Banks are assessed to have sufficient provisions and reserves to absorb potential loan losses. 

Credit Growth and Monetary Conditions 

System wide loan growth is expected to increase to 11% to 13% in FY27, compared with 10.6% in FY26 year to date. With inflation remaining under control, monetary policy easing in FY27 would depend on any visible slowdown in economic activity. The Reserve Bank of India has reduced the policy rate by 125 basis points to 5.25% during 2025. 

Read More: Goldman Sachs Lifts India’s CY26 GDP Growth to 6.9% After US–India Trade Deal! 

Capitalisation and Liquidity 

Banks are expected to maintain stable funding and liquidity positions, with deposit growth keeping pace with loan expansion. Capitalisation levels are supported by internal capital generation and stable profitability among large corporate borrowers. 

Conclusion 

The 6.4% GDP growth projection for FY27 reflects expectations of steady domestic consumption, supportive policy measures and a stable financial system, even as growth moderates from recent higher levels. 

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