NEW DELHI, May 28: Chief economists across the world expect the global economic growth to weaken over the next one year, but India stands out as a geography with the strongest growth expectations, a new WEF survey showed on Thursday.
In its latest Chief Economists’ Outlook, the World Economic Forum (WEF) said nearly nine in ten chief economists surveyed expect global growth to weaken over the coming year, though only 13 per cent think there could be a global recession.
According to the survey, 94 per cent expected global inflation to rise due to the closure of the Strait of Hormuz driving up energy and food costs and disrupting supply chains.
The survey showed a reversal of the cautious optimism seen at the start of the year, as conflict in the Middle East and the closure of the Strait of Hormuz fuel concerns over a major global economic shock.
Chief economists ranked the current closure duration of the Strait of Hormuz as significantly more disruptive than last year’s tariff turmoil.
If the closure persists in the second half of the year, they expect its impact could approach the severity of the COVID-19 crisis, compounding effects across global supply chains, energy and food costs.
“Only months ago, the Chief Economists community was cautiously optimistic. The conflict in the Middle East changed that, and the economic scarring from the situation thus far is already expected to last into the months ahead,” WEF Managing Director Saadia Zahidi said.
“The longer the disruption lasts, the heavier the long-term cost for those who can least afford it,” she added.
The survey said the crisis is expected to hit the Middle East and North Africa region the hardest.
By contrast, India and the United States are expected to remain relatively resilient, supported by domestic demand and investment, the WEF said.
Specifically about India, it said the country’s growth prospects continue to stand out.
“Of the chief economists surveyed, 52 per cent expect strong or very strong growth in the year ahead, making India the geography with the strongest growth expectations in the survey,” it said.
Early 2026 reporting pointed to a broader opening in trade policy and to a policy push behind infrastructure, technology and domestic capacity-building, according to the WEF.
While the economy still remains resilient and growth for 2026-27 is projected at 6.5 per cent, it still faces rising risks from the conflict in the Middle East.
“Depreciation pressures have forced the central bank to shed USD 40 billion in foreign-exchange reserves in March to stabilise the currency,” it added.
On the global business environment, the WEF said, India offers the clearest blend of scale, growth and potential among large emerging markets.
It noted that the country has kept opening channels for trade and capital, maintaining an active economic policy stance and expanding market access.
In particular, India embraced free trade by entering into new agreements, including with the EU, it said.
On the impact of the West Asia crisis, the WEF said the main pressure point is energy prices.
In most regions, energy prices are expected to increase and energy price increases were repeatedly flagged by the vast majority of surveyed chief economists among the major concerns in the current global outlook.
Southeast Asia is expected to bear the brunt, with 62 per cent of respondents anticipating significantly higher energy prices over the next 12 months.
However, this number dropped to 45 per cent in Europe and to 41 per cent in both Japan and India. (PTI)
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