‘Fastest among G20 nations’- Moody's pegs India’s FY27 growth at 6.4%

India's FY27 GDP growth: Moody's Ratings projected India’s gross domestic product (GDP) to grow at 6.4 per cent in the financial year 2027 (FY27), the fastest pace among G-20 economies. The US-based ratings agency expects that the economic growth will be catapulted by strong domestic consumption, policy measures, and a stable banking system, news agency PTI reported.

In its banking system outlook report, Moody's said their asset quality will remain resilient, with some stress among micro, small and medium enterprises (MSMEs). Regardless, banks have sufficient reserves to absorb loan losses, PTI added, citing the report.

"The rationalisation of the goods and services tax (GST) in September 2025 and an earlier increase in personal income tax thresholds will help improve affordability for consumers and support consumption-led growth,” Moody's statement was quoted as saying by PTI.

However, FY'27 GDP growth estimates by Moody's are lower than the 6.8-7.2 per cent range projected by the Finance Ministry's Economic Survey tabled in Parliament last month.

Top Highlights From Economic Survey

FY27 GDP growth seen in 6.8 per cent to 7.2 per cent range

Medium term growth potential around 7 per cent

Global economic environment remains uncertain

Geopolitical tensions, trade disruptions across major economies

Domestic economy remains on a stable footing

FY27 expected to be year of adjustment

Growth is good; the outlook remains favourable

Share of final pvt consumption expenditure in GDP rose 61.5%

According to the first advance estimates of the national income released by the MoSPI, manufacturing and construction are estimated to achieve a growth rate of 7 per cent.

"Real GDP (Gross Domestic Product) has witnessed a 7.4 per cent growth rate in FY 2025-26, compared to a growth rate of 6.5 per cent in FY 2024-25. Buoyant growth in the Services Sector has led the Indian economy to register Real GVA growth of 7.3 per cent in FY 2025-26," the MoSPI said in a statement.

India GDP FY 2025-26: Key Highlights

Real GDP has been estimated to grow by 7.4 per cent in FY 2025-26 against the growth rate of 6.5 per cent during FY 2024-25.

Nominal GDP is estimated to grow at 8.0 per cent in FY 2025-26.

Buoyant Growth in the Services Sector has been found to be a major driver in the estimated

Real GVA growth rate of 7.3 per cent in FY 2025-26.

Financial, Real Estate & Professional Services and Public Administration, Defence & Other Services in the Tertiary Sector have been estimated to attain a substantial growth rate of 9.9 per cent at Constant Prices in FY 2025-26.

Trade, Hotels, Transport, Communication & Services related to the Broadcasting Sector have been estimated to grow by 7.5 per cent at Constant Prices in FY 2025-26.

Manufacturing and Construction in the Secondary Sector has been estimated to achieve a growth rate of 7.0 per cent at Constant Prices in FY 2025-26.

The Agriculture & Allied Sector (3.1 per cent) and the Electricity, Gas, Water Supply & Other Utility Services Sector (2.1 per cent) have seen a moderate growth rate in GVA at Constant Prices during FY 2025-26.

Real Private Final Consumption Expenditure (PFCE) has been estimated to attain a growth rate of 7.0 per cent during FY 2025-26.

Gross Fixed Capital Formation (GFCF) has been estimated to have 7.8 per cent growth rate at Constant Prices during FY 2025-26, compared to 7.1 per cent growth rate in the previous FY.