India Set To Drive South Asia’s Growth Amid Global Economic Uncertainty: WEF Survey

Chief economists from around the world remain most optimistic about strong economic growth in South Asia, with India poised to be the primary engine of expansion in 2025 and 2026, according to the World Economic Forum’s latest Chief Economists Outlook report released on Wednesday.

India Leads South Asia’s Robust Outlook

The WEF survey highlighted that one-third of economists expect strong or very strong growth in South Asia for the rest of 2025, despite global headwinds.

India, the region’s largest economy, is forecast to grow by 6.2% in 2025 and 6.3% in 2026, according to IMF projections.

Economists cited India’s strong fundamentals and trade optimism, including the recent India-UK trade deal, as major contributors to this outlook.

Global Growth Outlook Divided

While South Asia enjoys optimism, global growth forecasts remain mixed.

Economists reported weak prospects for North America, moderate resilience in Asia-Pacific, and cautious optimism in Europe.

The outlook for China remained muted, with economists divided on whether the country would hit its 5% GDP growth target for 2024.

Economists warned that trade policy volatility and the disruptive impact of AI are key risks to global economic stability.

The survey revealed that 97% of economists view trade policy as a major source of uncertainty, while 87% believe that current US economic policies could delay strategic business decisions and heighten recession risks globally.

According to the WEF, 79% of economists see today’s global economic changes as structural rather than temporary.

With defence spending rising, 86% of respondents expect governments to resort to increased borrowing, which could limit investment in essential public services and infrastructure.

Artificial Intelligence: Growth Driver And Risk

AI emerged as both a transformative opportunity and a significant risk.

While 46% of chief economists expect AI to boost global GDP by up to 5 percentage points over the next decade, 47% foresee net job losses.

Only 19% believe AI will create more jobs than it eliminates.

Major concerns included the misuse of AI for disinformation (53%), rising market concentration (47%), and disruption of traditional business models (44%).

Need For Coordinated Policy Action

Saadia Zahidi, Managing Director at WEF, urged policymakers and business leaders to act strategically.

“To navigate today’s economic headwinds, leaders must invest in transformative technologies like AI while responding to uncertainty with coordination and agility,” she added.

Despite ongoing concerns, 56% of economists expect global economic conditions to improve over the next year.

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