Moody's upgrades India's growth forecast to 7%, sees resilience to global shocks

Résumé détaillé

Moody's said broad-based economic growth, strong domestic consumption and improving investment were helping India navigate external pressures. Sound macroeconomic fundamentals should also allow the economy to sustain growth close to 7% over the medium term, it added.

India's economy is better positioned to withstand the global energy supply shock triggered by the Iran war than previously anticipated, prompting credit rating agency Moody's to raise its growth forecast for the country to 7% for the financial year ending March 2027, from its earlier estimate of 6.5%.

Moody's said broad-based economic growth, strong domestic consumption and improving investment were helping India navigate external pressures. Sound macroeconomic fundamentals should also allow the economy to sustain growth close to 7% over the medium term, it added.

The revised forecast comes after India's economy grew 7.8% year-on-year in the April-June quarter of 2026, beating expectations. Strong manufacturing activity, an investment boom and robust consumer demand contributed to the expansion.

Moody's said India had adjusted to the energy price shock better than it had previously expected.

The country has been able to diversify its sources of crude oil and gas supplies, helping reduce its exposure to disruptions in global energy markets. State-backed oil marketing companies and tax cuts have also helped shield consumers from the immediate impact of higher energy prices.

The agency also pointed to signs of a potential revival in private sector investment.

High-frequency indicators, including robust production and imports of capital goods, accelerating industrial credit growth and rising capacity utilisation, suggest that India could be approaching a new private capital expenditure cycle.

A sustained pickup in private investment could provide another source of support for economic growth, alongside consumption and government-led infrastructure spending.

Despite the improved outlook, Moody's identified several risks that could affect India's growth trajectory.

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