Moody’s lowers India's 2026 economic growth forecast to 6%

New Delhi: Rating agency Moody's on Tuesday lowered its forecast on India's GDP growth for 2026 by 80 basis points to 6%, citing weaker private consumption and slower investments and high energy costs amid the ongoing West Asia tensions.

In its latest Global Macro Outlook, the rating agency said the impact of the global supply chain disruptions would linger in 2027 impacting economic growth.

For the calendar year 2027 also the rating agency expects India’s gross domestic product (GDP) to remain at 6%, which is 0.5 percentage point lower than its earlier projection.

“Our central scenario projection of 6% growth in both 2026 and 2027, following 7.5% growth in 2025, reflects more subdued private consumption, capital formation, and industrial activity amid tighter financial conditions and higher energy costs,” Moody's said in its report.

The rating agency noted that the impact of high energy prices and fuel and fertilizer-related shortages would vary widely across countries, depending on their exposure and resilience.

“The global outlook remains highly uncertain amid an increasingly prolonged confrontation and fragile ceasefire between the US and Iran,” Moody’s said in a report titled “Global Macro Outlook (May 2026 Update): Global energy market stress weighs on growth prospects.”

Despite the slowdown, India will continue to hold its position as the fastest growing major economies.

As per the latest NSO data, India’s GDP growth is estimated at 7.6% in the financial year 2025-26.

For the current financial year, the Reserve Bank of India (RBI) has pegged the GDP growth at 6.9%.

However, several agencies have lowered their projections on India’s GDP growth in the recent weeks citing the adverse impact of the high energy costs on the economy.

Crisil has lowered its forecast on India’s economic growth for the current financial year to 6.6%. SBI Research has also pegged FY27 growth at 6.6%.

For the January-March 2026 quarter, SBI Research expects the GDP growth to remain at 7.2%.

Meanwhile, the National Statistics Office (NSO) on Tuesday revised its release schedule for GDP data. The national accounts data, which used to be released on the last working day of May, would be now released on June 7, or the previous working day if June 7 is a holiday.

The provisional estimates of GDP for FY 2025-26 and quarterly estimates of GDP for the fourth quarter (January-March) of 2025-26 is scheduled to be released on June 5.

“The need for revising the release date has arisen as certain critical datasets become available only after a lag of up to two months,” the Ministry of Statistics & Programme Implementation said in a statement.