India’s economic growth is projected to gradually ease over the next few years, with Moody’s Investors Service estimating GDP expansion to slow to 6.3 per cent by 2028, according to its latest report released on Wednesday.
The agency expects India’s GDP to grow by 7 per cent in 2026 and 6.5 per cent in 2027, compared with an estimated 7.5 per cent growth in 2025, indicating a steady moderation from recent highs.
The projected slowdown aligns with a broader regional trend across the Asia-Pacific, where growth is forecast to decline to 3.8 per cent in 2026 from 4.3 per cent in 2025, and further to 3.6 per cent in 2027.
Moody’s noted that weakening domestic demand and a likely deceleration in export growth are key factors weighing on the region’s outlook. Despite these pressures, India is expected to retain its position as the fastest-growing major economy in the region.
The report also flagged rising inflation risks, projecting India’s annual inflation at 4.5 per cent in 2026, up from 2.2 per cent in 2025.
It pointed to geopolitical tensions, particularly in the Middle East, as a key uncertainty that has pushed commodity prices higher, echoing supply disruptions seen during the pandemic and the Russia-Ukraine war.
On the labour front, the unemployment rate is expected to inch up to 7 per cent in 2026 from 6.9 per cent in 2025, suggesting modest stress in job creation alongside slowing growth.
Overall, while India’s growth trajectory remains relatively strong compared to peers, the report underlines emerging global and domestic challenges that could shape the pace of expansion in the coming years. |
