UPSC Prelims Practice Questions — Moody’s projects India’s GDP to grow 6.4% in FY27
Q1. In early February 2026, the projection that India would be the single fastest-growing G-20 economy in FY27 with GDP growth of exactly 6.4% was released in a Banking System Outlook report by which one of the following?
- A. Moody's Ratings
- B. S&P Global Ratings
- C. Fitch Ratings
- D. the Reserve Bank of India
Q2. According to Moody's February 2026 projection, India was identified as the fastest-growing economy within which one of the following groupings?
- A. G-20
- B. G-7
- C. BRICS
- D. SAARC
Q3. Moody's revised its India GDP growth forecast downward to 6% in 2026. This revision was primarily attributed to which one of the following developments?
- A. Escalation of the West Asia (Israel) conflict, raising energy import costs and inflation risks
- B. A sharp series of interest-rate hikes by the US Federal Reserve
- C. A domestic non-performing-asset crisis in India's public sector banks
- D. A widespread failure of the south-west monsoon
Q4. In Moody's rationale for cutting India's growth forecast, the channel through which a West Asia conflict is expected to raise Indian inflation is best described as:
- A. Higher crude oil and LPG import costs, as West Asia supplies over half of India's crude imports and over 90% of its LPG
- B. A collapse in India's software services exports to the Gulf region
- C. A sudden withdrawal of foreign portfolio investment from Indian equity markets
- D. A fall in remittances from Indian workers in the Gulf countries
Q5. With reference to Moody's sovereign rating of India, consider the following statements:
1. Baa3 is the lowest investment-grade rating on Moody's scale.
2. Moody's upgraded India's rating to Baa2 in November 2017.
3. India's current Moody's sovereign rating is Ba1, a sub-investment (junk) grade.
4. In June 2020, Moody's downgraded India's rating back to Baa3.
Which of the above is/are correctly identified?
- Baa3 is the lowest investment-grade rating on Moody's scale.
- Moody's upgraded India's rating to Baa2 in November 2017.
- India's current Moody's sovereign rating is Ba1, a sub-investment (junk) grade.
- In June 2020, Moody's downgraded India's rating back to Baa3.
- A. 1, 2 and 3
- B. 2 and 4 only
- C. 1, 2 and 4
- D. 3 and 4
Q6. On Moody's rating scale, India's sovereign rating of 'Baa3' is best described as:
- A. The lowest rung of investment grade, one notch above speculative (junk) grade
- B. The highest investment-grade rating available
- C. A speculative-grade (junk) rating below investment grade
- D. A rating denoting that the issuer is in default
Q7. Among the 'Big Three' global credit rating agencies, which one is dual-headquartered in New York and London?
- A. Fitch Ratings
- B. Moody's Ratings
- C. S&P Global Ratings
- D. DBRS Morningstar
Q8. Consider the following as members of the 'Big Three' global credit rating agencies:
1. Moody's Ratings
2. S&P Global Ratings
3. Fitch Ratings
4. CRISIL
Which of the above is/are correctly identified?
- Moody's Ratings
- S&P Global Ratings
- Fitch Ratings
- CRISIL
- A. 1 and 2 only
- B. 1, 2 and 3
- C. 1, 3 and 4
- D. 2, 3 and 4
Q9. With reference to Moody's February 2026 Banking System Outlook for India, consider the following:
1. India's banking sector asset quality would remain resilient.
2. Some stress persists among MSME borrowers.
3. Banks hold sufficient reserves to absorb loan losses.
4. Moody's assigned a 'negative' outlook to India's banking sector.
Which of the above is/are NOT correct?
- India's banking sector asset quality would remain resilient.
- Some stress persists among MSME borrowers.
- Banks hold sufficient reserves to absorb loan losses.
- Moody's assigned a 'negative' outlook to India's banking sector.
- A. 1 and 3
- B. 2 only
- C. 4 only
- D. 3 and 4
Q10. Moody's February 2026 Banking System Outlook projected India's system-wide non-performing assets (NPAs) to remain within which of the following ranges?
- A. 2–2.5%
- B. 4–4.5%
- C. 6–6.5%
- D. 8–9%
Q11. Apart from Moody's original estimate, an FY27 (2026-27) GDP growth projection for India of 6.4% was also made by which one of the following?
- A. International Monetary Fund (IMF)
- B. World Bank
- C. Reserve Bank of India (RBI)
- D. Asian Development Bank (ADB)
Q12. With reference to India's growth relative to other economies, consider the following statements:
1. India's projected FY27 growth exceeds China's projected 2026 growth of about 4.2%.
2. India is projected to be the fastest-growing G-20 economy in 2026, ahead of Indonesia.
3. India's FY27 growth is projected to be higher than its FY26 growth.
Which of the statements given above is/are correct?
- India's projected FY27 growth exceeds China's projected 2026 growth of about 4.2%.
- India is projected to be the fastest-growing G-20 economy in 2026, ahead of Indonesia.
- India's FY27 growth is projected to be higher than its FY26 growth.
- A. 1 only
- B. 1 and 2 only
- C. 2 and 3 only
- D. 1, 2 and 3