International rating agency Moody’s has reduced India’s GDP growth rate estimate from 6.5 percent to 6.3 percent for the calendar year 2025. The rating agency says that there will be a slowdown in economies at the global level. According to PTI news, the agency has given the reason for the US policy uncertainty and increase in trade restrictions. Moody’s said in its Global Macro Outlook 2025-26 (May update) that geopolitical tension like tension between India and Pakistan is also a possible negative risk to its basic development forecasts.
Estimated for 2026 intact
According to the news, Moody’s stated that investors and business costs are likely to increase, as they take into account new geopolitical conditions while deciding the investment, expansion and source of goods. Moody’s reduced India’s development estimates to 6.3 percent for the 2025 calendar year, but retained it at 6.5 percent for 2026. This can be compared to an increase of 6.7 percent in 2024. Moody’s hopes that the Reserve Bank of India will further reduce the benchmark policy rates to support development.
Global trade and investment may be affected
The rating agency said that this year economic development had already slowed down to return to its possible rate. We have further reduced our global development estimates for 2025 and 2026 due to policy changes and more intense policy uncertainty than before. Despite the restriction and decrease in some tariffs, policy uncertainty and business tension, especially between the US and China, are likely to affect global trade and investment, which will also affect the G20.
Moody’s has reduced GDP growth estimates for the US from 2 percent and 1. 8 percent to 1 percent in 2025 and 1. 5 percent in 2026. Comparison of this in 2024.
An increase of 8 percent can be done. For China, Moody’s hopes that 2025 will increase 3.8 percent in 2025 and 3.9 percent in 2026, which is less than 5 percent in 2024.
Effective tariff rates for America at the peak
Moody’s said it is clear that the American trade strategy is still developing. Except China, which has implemented 125 percent tariffs on most US imports and banned rare earth exports to the US, most of the major trading partners have opted not to retaliate so far. We believe that overall, we are currently at the peak of effective tariff rates for the US and will be reduced in the coming months. Moody’s basic forecasts include instability in the financial market and the ongoing political stress in many geographical areas.
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