India's Economic Boom: 7% GDP Growth Projected for 2025 Amid Global Challenges

The country will lead growth among emerging markets and in the Asia Pacific (APAC) region, said the global rating agency. "India will lead growth among emerging markets and across the region, with GDP growing 7 per cent in 2025 and 6.4 per cent in 2026," according to a note by Moody's Ratings.

The average GDP growth in APAC is projected to remain steady at 3.4 per cent in 2026, compared to expected growth of 3.6 per cent in 2025.

According to the rating agency, emerging markets will drive GDP growth in the region, with average growth of 5.6 per cent.

In September, Moody's Ratings affirmed India's long-term local and foreign-currency issuer ratings and the local-currency senior unsecured rating at Baa3. The global ratings agency has also maintained its outlook for India as stable.

"The rating affirmation and stable outlook reflect our view that India's prevailing credit strengths, including its large, fast-growing economy, sound external position and stable domestic financing base for ongoing fiscal deficits, will be sustained," Moody’s said in its note.

The rating agency has said that the US' imposition of high tariffs on India will have limited negative effects on India's economic growth in the near term. "However, it may constrain potential growth over the medium to long term by hindering India's ambitions to develop a higher value-added export manufacturing sector," said the rating agency.

India's credit strength is balanced by long-standing weaknesses on the fiscal side which will remain. Strong GDP growth and gradual fiscal consolidation will lead to an only very gradual decline in the government's high debt burden, and will not be sufficient to materially improve weak debt affordability, especially as recent fiscal measures to reinforce private consumption erode the government's revenue base, according to the note.

- IANS