New Delhi: India is poised to remain the strongest performer among G-20 economies over the next two years, with growth expected to average 6.5 per cent through 2027, according to Moody’s Ratings’ Global Macro Outlook 2026-27 released on Wednesday. The agency said the country’s economic momentum will continue despite global trade disruptions, including steep US tariffs introduced under the Trump administration.
Moody’s highlighted that India’s expansion is being powered by sustained public infrastructure spending, healthy consumer demand and a broader export basket, even as private corporate investment remains somewhat restrained.
Export resilience amid tariffs
Despite global uncertainty and high US duties on select Indian exports, the ratings agency said that the country’s economy has held firm. “Indian exporters, facing 50 per cent US tariffs on some products, have succeeded in redirecting exports, its overall exports climbed 6.75 per cent in September even as shipments to the U.S. dropped 11.9 per cent,” the report said.
The agency credited India’s economic stability to supportive macroeconomic conditions, including controlled inflation and the central bank’s careful policy stance. “In India, the RBI held its repo rate steady in October, showing that it is cautious on policy with inflation subdued and growth strong,” Moody’s added.
Robust foreign capital inflows, buoyed by strong investor confidence, have helped offset external shocks and ensured liquidity remains adequate. While domestic consumption continues to anchor growth, Moody’s observed that businesses are still holding back on major capital expenditure.
Global growth trends
Moody’s forecast global GDP growth of about 2.5 per cent to 2.6 per cent in 2026 and 2027, indicating a steady but uneven expansion. Developed economies are expected to grow close to 1.5 per cent, while emerging markets, led by India, are projected to expand around 4 per cent. The report said “policy divergence and trade shifts will shape a stable but mixed global growth outlook” as countries adjust to geopolitical and post-pandemic realignments.
In the United States, the economic pace is moderating but stable, aided by moderate consumer activity and ongoing investment linked to artificial intelligence. Moody’s said “narrow credit spreads, robust equity markets and ample funding liquidity have created benign financial conditions.” The agency noted that fiscal support, easier monetary policy and regulatory relaxation could extend the US credit cycle into 2026, although risks could accumulate as the cycle matures.
Europe is seeing a gradual improvement supported by stable employment, wage gains and rate cuts by the European Central Bank. Additional spending on infrastructure, climate projects and Germany’s higher allocations for defence and public works are expected to lift growth.
Moody’s projected China’s economy to expand by 5 per cent in 2025 due to government support measures and resilient exports. But with domestic consumption still uneven, weak corporate lending and a decline in fixed investment, the ratings agency expects growth to weaken to 4.2 per cent by 2027.