The US-based rating agency cited broad-based economic momentum and resilience to energy supply shocks for the upward revision.
Moody’s Ratings has increased its growth projection for the Indian economy to 7 per cent for the 2026-27 financial year, up from an earlier estimate of 6.5 per cent, according to reports by The Times of India, BusinessLine and Siasat.
In its Global Macro Outlook 2027-28, the agency stated that the country's economic momentum and its ability to withstand energy supply shocks justified the higher forecast. The agency noted that strong macroeconomic fundamentals, improving investment dynamics and robust consumption should help maintain growth near 7 per cent over the medium term.
However, the rating agency identified several near-term risks. It noted that household consumption is at risk from widening price pressures, as headline inflation sits near the top of the Reserve Bank of India's (RBI) 2-6 per cent target range. Additionally, strengthening El Nino conditions and a weak southwest monsoon could impact rural demand and agricultural output.
The agency also warned that tighter monetary policy might slow the recovery of private investment, noting that the RBI is expected to raise rates further. High-frequency indicators, such as rising capacity utilisation and industrial credit growth, suggest India may be entering a new private capital expenditure cycle.
India's ability to diversify crude and gas supplies has helped the economy manage energy price shocks. The agency added that state-backed oil marketing companies and tax cuts helped protect consumers, while large refining capacity has limited fuel supply disruptions.
