Moody's Ratings in its Global Macro Outlook 2027-28 has revised India’s FY27 growth forecast upward to 7 per cent from 6.5 per cent led by broad-based economic momentum and energy supply shock resilience. It noted that robust consumption, improving investment dynamics and strong macroeconomic fundamentals imply that the economy appears well positioned to sustain growth near 7 per cent over the medium term.
However, it cautioned that near-term risks to growth persist as household consumption remains vulnerable to intensifying and broadening price pressures. Headline inflation is hovering near the upper limit of the RBI’s 2-6 per cent target band, while a weak southwest monsoon and intensifying El Nino conditions are expected to hurt agricultural output and rural demand. Moreover, it said ‘With the RBI on track to raise rates further, tighter monetary policy could delay the recovery in private investment.’
Besides, it stated that India has adjusted to the energy price shock better than previously assumed, helped by its ability to diversify crude and gas supplies and buffer consumers from the immediate price impact through state-backed oil marketing companies and tax cuts. It mentioned India is also home to the world's largest single-site refining complex, and its large and sophisticated refining capacity has helped limit fuel supply disruptions while supporting its role as a major exporter of refined petroleum products. It added overall economic activity remains robust amid expanding manufacturing and services purchasing manager indexes and double-digit year-on-year growth in goods and services tax revenue, vehicle sales and merchandise exports.