Moody's cuts India FY27 GDP growth forecast to 6% from 6.8% on West Asia conflict impact

Key facts

• Moody's Ratings reduced India's FY27 real GDP growth projection to 6% from an earlier 6.8%.
• West Asia supplies around 55% of India's crude oil imports and over 90% of liquefied petroleum gas (LPG).
• Moody's projects FY27 retail inflation to average 4.8%, up from 2.4% in FY26.
• The Organisation for Economic Co-operation and Development (OECD) expects India's GDP growth to moderate to 6.1% in FY27 after 7.6% growth in 2025-26.
• Domestic rating agency Icra forecasts FY27 growth at 6.5% due to elevated energy prices linked to the West Asia conflict.
• India's current account deficit narrowed to about 0.4% of GDP in calendar year 2025 from 0.9% in 2024.
• Moody's anticipates the current account deficit to stay around 1-1.5% of GDP for 2026 and 2027.
• Gulf region accounts for roughly 40% of India's total remittance inflows, posing a vulnerability amid conflict.
• Global crude prices have risen by almost 50% since United States and Israel launched military strikes against Iran on 28 February.
• Moody's expects central government debt to decline gradually toward 50% of GDP by 2030-31 from about 57% of GDP in 2024-25.