India To Remain Fastest-Growing Major Economy In 2026, 2027: Moody's Analytics

New Delhi, Jul 17 (KNN) India will remain the world's fastest-growing major economy in 2026 and 2027 despite a moderation in growth, according to Moody's Analytics' latest report, Global Outlook: Running Hot, Running Cold.

India To Lead Global Growth Despite Moderation
The agency projected global economic growth at 2.5 percent in 2026 and 2.8 percent in 2027, below the 3 percent-plus pace the global economy is considered capable of achieving.

Moody's Analytics said growth is expected to slow in 2026, though by less than it had anticipated earlier this year, reported Business Standard.

It noted that strong demand for artificial intelligence (AI) has helped cushion the global economy from a sharper slowdown by boosting data centre investments, supporting technology exports in Asia and sustaining global equity markets.

Geopolitical Risks Continue To Weigh
However, the report warned that geopolitical tensions, trade disruptions, elevated asset valuations and financial market volatility continue to pose significant downside risks to global growth.

According to the agency, conflicts in West Asia and trade frictions involving the United States have increased costs for businesses and contributed to a ‘K-shaped’ global economy, where some countries and sectors continue to expand while others lag behind.

Central Banks Face Policy Challenges
The report said central banks face a difficult balancing act as inflationary pressures re-emerge alongside weakening growth. 

Although easing tensions in West Asia could make the recent rise in inflation temporary, tighter monetary policies are likely to weigh on business activity and consumer spending.

Moody's Analytics also cautioned that prolonged disruptions to commodity flows through the Strait of Hormuz or renewed escalation in the Middle East could drive oil prices higher, further increasing inflation and slowing economic growth.

The agency said such developments would complicate monetary policy decisions, forcing central banks to choose between supporting growth through lower interest rates or containing inflation through tighter policy.

India Outlook Remains Strong
Separately, Moody's Ratings had revised India's 2026 growth forecast downward to 6 percent from 6.8 percent in May this year. However, Moody's Analytics maintained that India is expected to remain the fastest-growing major economy over the next two years.

(KNN Bureau)