Global Growth Outlook Improves, Yet Geopolitics and Inflation Keep Economists Wary: WEF

The global economic outlook has improved, with 56 per cent of chief economists expecting conditions to remain stable or improve over the next 12 months, the World Economic Forum’s Chief Economists’ Outlook said.

The figure marks a change from May, when 89 per cent expected conditions to weaken. However, only one-quarter of economists surveyed expect the global economy to become more resilient.

Geopolitical conflicts remain a source of uncertainty, with 97 per cent of respondents identifying them as a likely risk over the coming year. Another 58 per cent expect asset-price corrections.

The outlook for India remained strong. Ninety-eight per cent of economists surveyed expect moderate or stronger growth in India over the next 12 months, including 74 per cent who foresee strong or very strong growth. The figure expecting strong or very strong growth was 52 per cent in May.

WEF said India’s fiscal 2026-27 growth forecast was raised to 6.7 per cent in August, with domestic demand supporting the outlook. Higher energy prices continue to weigh on growth prospects.

Growth assessments were also strong for South-East Asia, Central Asia and the United States. China’s outlook weakened, with about one-third of economists expecting weak growth. Europe remained the weakest region, with 61 per cent anticipating weak or very weak growth.

Cost pressures remain widespread. Economists expect prices to increase for food, electricity and transport, with 88 per cent, 83 per cent and 77 per cent respectively identifying these categories. Real incomes are expected to decrease or stagnate in most regions, while more than 60 per cent of respondents expect incomes to rise in India and South-East Asia.

Artificial intelligence is another area of change. Ninety-seven per cent of economists expect AI adoption to increase, while 79 per cent foresee significant backlash over data-centre expansion. Sixty-one per cent do not expect significant job creation from AI.

The survey found that 69 per cent expect Chinese large language models to catch up with US counterparts within the next 12 months.