India has the strongest economic growth outlook among the geographies, a survey — the World Economic Forum’s (WEF) Chief Economists’ Outlook — revealed. Of chief economists surveyed, 98% expect moderate or stronger growth in India over the next 12 months, including 74% who anticipate strong or very strong growth, compared with 52% in May, the WEF said in the report released Tuesday.
The Reserve Bank of India projects India to grow 6.7% in FY27, reflecting continued resilience in domestic demand. The Indian economy grew 7.8% in the April-June quarter.
“Growth is expected to remain supported by resilient domestic demand, although higher energy prices continue to weigh on the outlook,” the WEF said. India’s growth prospects are brighter than the US and China. For US economic growth, 98% of chief economists surveyed expected moderate or strong growth over the next 12 months, including 31% who now anticipate strong growth.
Chief economists’ views of China’s growth outlook, however, have weakened compared to May. In the latest survey, 69% of chief economists expect moderate or strong growth over the next 12 months, down from 77% in May, while 31% now anticipate weak growth, the WEF said.
Majority of chief economists surveyed, at 56%, expect the global outlook to remain stable or improve. This is a sharp improvement from the May survey, when 89% expected conditions to weaken.
“The improvement comes with limited confidence that the stabilization will hold. Nearly all respondents (97%) name geopolitical conflicts as a likely source of uncertainty over the next year, 58% expect asset-price corrections, and only one-quarter expect the global economy to become more resilient,” the WEF said.
On unemployment in India, 70% of chief economists surveyed expect no change over the next 12 months. Respondents were divided between an increase (17%) and a decrease (13%) in unemployment, respectively. The unemployment rate among people aged 15 and above declined to 5% in August from 5.1% in July, while labour force participation increased from 55.4% to 55.6% during the same period. “These developments point to relatively stable labour market conditions alongside strong activity, although sustained employment creation remains important,” the WEF said.
Expectations for inflation in India have eased since May, with 55% of chief economists expecting moderate inflation and 45% expecting high inflation over the next 12 months, compared with 61% expecting high or very high inflation in May.
Consumer price index (CPI) inflation rose to a 20-month high of 4.8% in August, staying above the RBI’s 4% medium-term target but still within the upper bound of the 2–6% tolerance range.
A majority of respondents, 67%, expect the RBI’s Monetary Policy Committee to keep the repo rate unchanged at 5.25%, while 24% anticipate tightening.
Fiscal policy is also expected to remain broadly stable, with 72% of survey respondents anticipating no change and 22% expecting looser policy, the WEF said. “Strong growth and inflation that remains within the tolerance range are broadly consistent with survey expectations of policy stability,” the WEF said.