India will remain the fastest growing economy in G-20: Moody’s estimates economy to grow at 6.5% by 2027; No effect of American tariff

Moody’s Ratings has said that India will remain the fastest growing economy among the G-20 countries for the coming two years. According to Moody’s, India’s GDP growth is expected to average 6.5% till 2027.

According to the report, India’s economy will remain strong despite high US tariffs and global uncertainties.

Indian economy is not affected by American tariffs

Despite 50% US tariffs, Indian exporters have successfully discovered new markets. India’s total exports increased by 6.75% in September, while exports to the US declined by 11.9%.

Moody’s said in its ‘Global Macro Outlook 2026-27’ report that India’s growth rate will be supported by strong infrastructure investment, domestic consumer demand and export diversification. Due to these reasons the economic momentum will remain strong.

What is G-20 group?

G-20, i.e. Group of Twenty, is an informal group of the world’s 20 largest economies, which is formed to negotiate and find solutions to global economic issues.

It was formed in 1999 as the Financial Stability Forum, but after the Global Financial Crisis of 2008, it was renamed as G-20 Summits from 2009, so that big countries can cooperate on issues like inflation, trade, climate change and development and keep the global economy stable.

It includes 19 countries. Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, UK and US. The European Union (EU) is also a member, which together covers 85% of the world’s GDP and 75% of global trade.

What is GDP?

GDP is used to track the health of the economy. It shows the value of all goods and services produced within the country over a period of time. In this, the foreign companies which produce within the country’s borders are also included.

There are two types of GDP

There are two types of GDP. Real GDP and Nominal GDP. In real GDP, the value of goods and services is calculated at the base year’s value or stable price. At present the base year for calculating GDP is 2011-12. Whereas nominal GDP is calculated at current price.

How is GDP calculated?

A formula is used to calculate GDP. GDP=C+G+I+NX, here C means private consumption, G means government spending, I means investment and NX means net export.

Who is responsible for the fluctuations in GDP?

There are four important engines for increasing or decreasing GDP. The first is you and me. Whatever you spend contributes to our economy. Second is private sector business growth. It contributes 32% to GDP. Third is government expenditure.

This means how much the government is spending to produce goods and services. It contributes 11% to GDP. And fourth is, net demand. For this, India’s total exports are subtracted from total imports, because India has more imports than exports, hence its impact is negative on GPD.