Moody’s keeps India’s 2025 GDP growth forecast at 7%, retail inflation to rise through 2027

Moody’s on Thursday kept India’s economic growth forecast for 2025 unchanged at 7%, as the country remains one of the fastest-growing major economies.

The rating agency also maintained its outlook for India’s GDP growth at 6.4% in 2026 and 6.5% in 2027, according to its report “Global Macro 2026: Growth will be steady but subdued in 2026.”

Moody’s expects India’s retail inflation to edge higher over the next two years, rising from 2.8% in 2025 to 3.5% in 2026 and touching 4% by 2027.

The global environment will remain mixed, Moody’s said, with overall real GDP growth likely to hover around 2.5% in both 2026 and 2027.

Growth prospects vary widely across the G20, it added.

Advanced economies are projected to expand around 1.5% annually over the next two years, while emerging markets are expected to grow about 4%.

Moody’s said the US economy remains resilient but is showing signs of slowing as hiring and income gains soften late in the business cycle.

Strong consumer spending and investment in artificial intelligence have prompted upward revisions to its US forecast for 2025 and 2026.

According to the report, China is expected to grow 5% in 2025, supported by government stimulus and strong exports, though its momentum will gradually fade to 4.2% by 2027 amid uneven consumption, weak corporate lending and declining investment.