Home / Business and Economy / India's GDP to Surge: Fastest in G20 by FY27
India's GDP to Surge: Fastest in G20 by FY27
9 Feb
Summary
- India's real GDP is projected to grow at 6.4% in FY27.
- GST rationalization and income tax changes will boost consumption.
- Banks' operating environment to remain strong with loan growth acceleration.
Moody's Ratings forecasts India's real GDP to achieve a remarkable 6.4% growth in fiscal year 2026-27, positioning it as the fastest-growing economy among G20 nations. This optimistic outlook is primarily fueled by robust domestic consumption and supportive government policies. The agency specifically points to the rationalization of the Goods and Services Tax (GST) scheduled for September 2025 and prior increases in personal income tax thresholds as key drivers enhancing consumer affordability and consumption-led growth.
Despite this projected expansion, Moody's expects the Reserve Bank of India to maintain its current monetary policy stance, with further rate cuts contingent on any observable slowdown in economic activity. The agency anticipates a strong operating environment for the banking sector in 2026, underpinned by favorable macroeconomic conditions and ongoing structural reforms. Asset quality is expected to remain resilient, with sufficient capital reserves to manage potential loan losses, and system-wide loan growth is projected to rise to 11-13% in FY27.
