Moody’s cuts GDP growth forecast for FY27 to 6%

NEW DELHI: Moody’s Ratings has slashed India’s economic growth estimates for the current fiscal to 6% from 6.8% earlier, saying the ongoing conflict in West Asia will moderate growth momentum and raise inflation risks.
In its credit opinion report on India, Moody’s said prolonged disruptions, particularly LPG shipments due to the conflict, would lead to near-term household shortages, higher fuel and transport costs, and spillovers to food inflation through India’s reliance on imported fertilisers.

The region accounts for around 55% of crude oil imports and over 90% of liquified petroleum gas (LPG) supplies to India. “While inflation remains contained for now, geopolitical risks have tilted the inflation outlook to the upside,” Moody’s said while projecting inflation to average 4.8% in FY27, up from 2.4% in FY26.

With inflation risks reemerging and growth remaining robust, policy rates are likely to be held steady or raised gradually in fiscal, Moody’s said.
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