Economy: In 2027, India may grow 6.5%, and China 4.2%, says Moody’s
Virendra Pandit
New Delhi: Risks such as geopolitical tensions, trade disruptions, and unstable financial markets notwithstanding, the Indian economy is expected to grow by 6.4 percent in 2026 and 6.5 percent through 2027.
China’s economy is expected to grow around 4.2 percent in 2027.
Global ratings agency Moody’s on Thursday kept this forecast for India’s GDP growth, the media reported.
India’s growth will continue to remain strong because of heavy investment in infrastructure, rising consumer spending, and diversified exports, even though private companies are still cautious about spending.
In its report “Global Macro 2026: Growth will be steady but subdued in 2026,” the ratings agency said that India’s economy has remained strong despite global challenges and high US tariffs on some goods.
The US imposed 50 percent tariffs on Indian imports, including a 25 percent penalty for buying Russian crude, starting August 27. US President Donald Trump recently suggested that the two countries are working together and may reach a deal soon.
Moody’s said that global central banks are following different monetary policies. “The US Federal Reserve is easing its policy because of labour concerns, while other central banks are being more cautious. In emerging markets, China and Indonesia are cutting rates, but India’s Reserve Bank (RBI) is keeping its policy unchanged.”
The agency also noted the multiple risks ahead, including geopolitical tensions, trade disruptions, and unstable financial markets. “Global growth will likely remain steady but subdued, with advanced economies growing modestly and emerging markets mostly maintaining stronger momentum.”
“On trade, the possibility of China and the US decoupling has increased with rising restrictions and uncertainty, but other global economies could strengthen their relationships. Outlooks vary widely across G-20 economies,” Moody’s said.
On the positive side, new technologies may boost productivity but could also disrupt jobs and industries.
Although the US economy remains strong, the ratings agency said that it is starting to slow down.
Explaining the reason behind revising the US GDP growth upward, Moody’s said, “Hiring and income growth have become weaker, showing signs of a late-stage business cycle. However, consumer spending and investments in artificial intelligence (AI) continue to support growth.”
China’s economy, Moody’s said, is expected to grow around 5 percent in 2025, helped by government stimulus and strong exports. “But growth could slow to 4.2 percent by 2027. The domestic economy remains weak, with low consumer spending, limited corporate borrowing, and a drop in infrastructure investment.”
