India has emerged as the strongest growth story globally, with the World Economic Forum's latest Chief Economists' Outlook finding that 98% of chief economists expect moderate or stronger growth over the next 12 months, including 74% who anticipate strong or very strong growth. The September survey revealed a sharp jump from 52% in May, with India being the only geography specifically identified as having the strongest overall growth outlook. This contrasts sharply with China, where about one in three economists now expect weak growth, and Europe, which remains the weakest region with 61% anticipating weak or very weak growth. The United States, Southeast Asia and Central Asia also received strong growth assessments, placing India in a group of the world's most positively viewed growth engines. Overall, 98% of economists expect the Indian economy to record moderate or stronger growth over the coming year, as per the latest WEF report.
Despite maintaining its growth leadership, India's ranking for a favorable business environment for multinational companies dropped from second to fourth place in the latest WEF survey. Only 40% of respondents included India among their top three destinations, down from 56% in the previous survey. This decline contrasts with the US leading the ranking of favorable business environments for multinational companies, followed by South-East Asia and Europe (both up one position). China came in fifth with 31% of respondents including it in their top three destinations. The WEF noted that India's standing as a business destination for multinational companies has weakened, falling from second to fourth place in the survey, as only 40% of respondents included India among their top three choices, down from 56% in the previous survey.
India's standout position on household incomes mirrored its broader showing in the survey, where it retained the strongest growth outlook of any geography covered. Data released subsequently showed that India's GDP grew by 7.8 percent in the April-June quarter (Q1 FY27), beating the Reserve Bank of India's 7 percent projection despite geopolitical headwinds. The stronger-than-expected expansion has led several forecasters to raise their growth estimates for the year. Moody's increased its FY27 forecast from 6 percent to 7 percent, citing the resilience of the Indian economy amid the war in West Asia. Other institutions including ICRA (6.7% to 7.1%), Bank of Baroda (6.6-6.8% to 7%), IDFC First Bank (6.8% to 7.5%), and CareEdge (7% to 7.3%) have also revised their forecasts upward. The growth forecast for fiscal 2026-27 was raised to 6.7 percent in August from 6.5 percent anticipated in May. The World Economic Forum projects India's GDP to grow 6.7% in 2026-27 (April-March), driven by resilient domestic demand, which is in line with the Reserve Bank of India's forecast for FY27.
The survey captured mixed inflation expectations, with retail inflation climbing to 4.82 per cent in August from 4.45 per cent in July — a 20-month high on a back-series basis, and above the RBI's 4 per cent median target for a third straight month. However, more than half of survey participants expect retail inflation in India to moderate, while the remaining 45% see higher inflation over the next 12 months. Wholesale Price Index (WPI) inflation climbed to 9.92 per cent in August from 9.78 per cent in July, its second-highest print in 29 months with pressure concentrated in energy. The wide gap between near-double-digit wholesale inflation and far milder retail readings reflects buffering by the government and oil marketing companies rather than genuine household relief. Equity performance has lagged, with the Nifty 50 down 7.9 per cent since the start of the year as of 19 August, though this has improved to 10.45 per cent decline in 2023.
Policy expectations point to steadiness, with a majority of respondents (67%) expecting the RBI to hold monetary policy unchanged over the coming year, while 24% anticipate tightening. The central bank has kept its repo rate at 5.25 per cent for four consecutive reviews and will hold its next Monetary Policy Committee meeting on October 5-7. On the fiscal side, 72% expected no change and 22% see looser policy. The global economic outlook has improved significantly, with 56% of chief economists expecting the global outlook to remain stable or improve — a sharp improvement from May, when 89% expected conditions to weaken. However, nearly all respondents (97%) named geopolitical conflicts as a likely source of uncertainty over the next year, 58% expected asset-price corrections, and only one-quarter expect the global economy to become more resilient. Globally, 97% chief economists expect AI adoption to rise, but 79% foresee data-centre expansion facing significant backlash, with 61% not expecting significant global job creation.
