Moody’s has maintained India’s GDP growth forecast for 2025 at 7%, reaffirming the country’s position as one of the world’s fastest-growing major economies. The rating agency released the projections in its report titled “Global Macro 2026: Growth will be steady but subdued in 2026.”
For the following years, Moody’s continues to expect India’s GDP to grow 6.4% in 2026 and 6.5% in 2027, signalling a steady medium-term expansion trajectory supported by domestic demand and investment momentum.
Inflation to gradually rise over the next two years
Moody’s expects India’s retail inflation to inch upward through the next two years.
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2025: 2.8%
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2026: 3.5%
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2027: 4%
Despite the rise, the agency noted that inflation will remain manageable, even as global price pressures vary across regions.
Global environment remains mixed
The global macro outlook remains uneven, with Moody’s forecasting around 2.5% real GDP growth worldwide in both 2026 and 2027. Growth trends will differ significantly across G20 economies:
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Advanced economies: Expected to expand about 1.5% annually over the next two years.
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Emerging markets: Projected to grow at around 4%.
US slowdown emerging, but AI spending lifts forecast
Moody’s said the US economy, while still resilient, is beginning to show signs of slowing as hiring and income gains soften late in the business cycle. Strong consumer spending and rising investment in artificial intelligence have led Moody’s to revise its US growth projections higher for 2025 and 2026.
China’s growth to soften after 2025
China is expected to grow 5% in 2025, supported by government stimulus and strong export activity. However, Moody’s projects that momentum will gradually ease, with GDP growth slowing to 4.2% by 2027 due to weak corporate lending, uneven consumption, and declining investment levels.
