India Seen Leading Major Economies on Growth Despite Global Slowdown in 2026: Moody's

Global economic growth is expected to remain below its long-term trend over the next two years, according to Moody's Analytics. The agency has projected global GDP growth at 2.5% in 2026, followed by 2.8% in 2027, as per a CNBC TV18 report.  

Both estimates are lower than the world economy's potential growth rate of more than 3%, indicative of weaker demand, tighter financial conditions, and ongoing geopolitical uncertainty. 

India Expected to Maintain Relative Strength 

Against this backdrop, India is projected to remain the fastest-growing major economy in 2026, although growth is expected to slow from current levels.  

Moody's said India will "lose a step" as the global economy slows, but its growth is still forecast to exceed that of China, the United States, the euro area, the United Kingdom, Japan, Canada and the broader emerging markets. 

The report did not provide a revised growth estimate for India but said the country's relative position among major economies remains unchanged. 

Growth Forecasts Vary Across Regions 

China's economy is expected to grow by 4.6% in 2026 before easing to 4.2% in 2027. The US economy is forecast to average 2% growth across the two years.  

The euro area is expected to expand by 0.8% in 2026 and 1.6% in 2027, while Japan is projected to record average growth of less than 0.5%. 

Moody's said the global recovery remains uneven, with different regions facing varying levels of demand, inflation and investment. 

AI Investment Supports Activity, Risks Persist 

The report said investment in artificial intelligence-related infrastructure, including data centres, semiconductors and computing capacity, has supported production and exports in several Asian economies. This has helped offset some of the weakness seen in other sectors. 

At the same time, Moody's identified geopolitical tensions as the main downside risk. It said any escalation of the conflict in West Asia or extended disruption to shipping through the Strait of Hormuz could raise oil prices, increase inflation, and slow economic activity.  

Even if the conflict eases, tighter monetary policy is expected to weigh on business investment and household spending. 

Read More: India's Wholesale Inflation Surges Over 2-Year High at 9.87% in June 2026, as Food and Fuel Prices Surge! 

Conclusion 

Moody's expects global growth to remain subdued in 2026 and 2027. While India's economy is projected to slow alongside broader global trends, it is expected to continue recording stronger growth than other major economies during the period. 

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