India Projected as G20’s Fastest-Growing Economy with 6.4% GDP Growth in FY27

Moody’s has projected India’s real GDP to grow 6.4% in the financial year ending March 2027, placing it at the top among G20 economies. The estimate was released as part of the ratings agency’s latest report on the country’s banking system and operating environment. 

The projected pace would be lower than India’s recent growth trend. If realised, it would mark the slowest expansion in 4 years. It also remains below domestic projections.  

The Economic Survey has estimated growth at 6.8-7.2%, while official figures suggest the current financial year could close at around 7.4%. 

Drivers of Growth 

Moody’s said the FY27 outlook is linked to domestic consumption and policy support. The report noted that higher personal income tax thresholds and the rationalisation of Goods and Services Tax (GST) rates in September 2025 could improve household affordability and support spending. 

It also cited structural reforms and stable monetary policy as factors expected to support economic activity over the period. 

Banking System Outlook 

The report said the operating environment for banks is expected to remain stable through FY27. It noted that lenders hold adequate reserves to absorb potential loan losses, and large corporate borrowers have reported stronger balance sheets and profitability. 

Moody’s expects system-wide loan growth of about 11.13% in FY27, compared with 10.6% in FY26 so far. Corporate loan quality is expected to remain steady, though recoveries may moderate as most large stressed accounts have already been resolved. 

The agency also said the government is likely to maintain high levels of support for public sector banks. 

Policy and Inflation 

Moody’s said inflation staying under control would give the Reserve Bank of India some flexibility on policy in FY27. Any easing, however, would depend on clear signs of slower economic activity. 

Read More: Moody’s Pegs India GDP Growth At 7.3% For FY26; Higher Incomes May Boost Insurance Demand! 

Conclusion 

Moody’s expects India to remain the fastest-growing G20 economy in FY27, even though the projected growth rate is lower than domestic estimates. 

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