CHENNAI: Moody’s Ratings on Thursday projected that India will deliver a strong 7 percent real GDP growth in 2025, positioning the country as the top performer among large emerging market economies. The forecast confirms India’s status as the fastest-growing major G20 economy for the year. Moody’s expects growth to soften slightly to 6.4 percent in 2026, and then stabilize at around 6.5 percent in 2027, supported by domestic demand and continued government investment.
The ratings agency attributes India’s momentum to robust household consumption and sustained public spending, particularly in infrastructure, urban development, and other growth-focused areas. The government’s ongoing capital expenditure push is expected to keep internal demand steady, even as the global economy faces slowing growth and uncertainty. The country’s efforts to diversify its export basket and a supportive monetary policy stance also strengthen the growth outlook.
Yet, Moody’s also flags areas of caution. Private sector investment remains weak, with companies still reluctant to embark on large new expansion plans. This signals that economic growth is being driven mainly by consumers and the government, while business investment—the third pillar of GDP—continues to lag. Analysts see this as a gap that will need to close for India’s long-term growth story to become more balanced and job-creating.
The forecast arrives amid a fragile global environment marked by trade tensions, uneven demand, and economic slowdowns in several countries. In comparison, India’s ability to sustain strong consumption and maintain investment through public spending gives it a distinct advantage. For markets and industry, the projection reinforces optimism for corporate earnings and foreign capital interest, but it also serves as a reminder that risks remain, especially if global conditions worsen or domestic business confidence fails to pick up.
Overall, Moody’s outlook highlights India’s resilience and strong internal growth cycle. The coming years will reveal whether private investment regains momentum to complement consumption and government spending, helping India translate high GDP numbers into broader economic uplift, say economy analysts.