Moody's Forecasts India and Indonesia to Drive Emerging Market Growth

Moody's Ratings projects that India and Indonesia will drive growth in emerging markets outside the Gulf Cooperation Council region through 2027. In its latest global sovereigns report, the agency forecasts that median GDP growth for all rated sovereigns will rise to 3.1% from 2.5% in 2026.

The report highlights a divergence in fiscal health among major economies. While the United States, China, and France are expected to add significant debt due to higher borrowing costs, India's primary fiscal balance is projected to be sufficient to stabilize or lower its debt-to-GDP ratio. Moody's predicts that the United States and China will account for more than half of all global government debt by 2030.

Looking toward long-term productivity, the agency anticipates that the adoption of artificial intelligence will improve efficiency in large emerging markets over the next five to ten years, specifically citing China and India as primary beneficiaries.