2 days ago
WEF Economists See India’s Growth Outlook Strengthening Amid Risks
The World Economic Forum asked 36 economists about India’s economy.
Nearly all of them expect India to grow moderately or strongly during the next year.
About three-quarters expect very strong growth.
The WEF expects India’s economy to grow by 6.7 per cent in the 2026–27 financial year.
Spending by households is helping support this growth.
More than half of the economists expect inflation-adjusted household incomes to rise.
The unemployment rate fell slightly in August, and many economists expect jobs to remain broadly stable.
Most economists do not expect major changes to government spending or interest-rate policies.
Higher energy prices, conflicts and other global problems could still make growth harder.
Seventy-four per cent of surveyed economists expect strong or very strong Indian growth over the next 12 months, up from 52 per cent in May.
The World Economic Forum raised its India growth forecast for fiscal year 2026–27 to 6.7 per cent, supported by resilient domestic demand.
Inflation expectations have moderated, although consumer inflation reached 4.8 per cent in August, above the 4 per cent target but within the 2–6 per cent tolerance range.
Most economists expect India’s monetary and fiscal policies to remain unchanged, with 67 per cent forecasting stable monetary policy and 72 per cent stable fiscal policy.
India’s labour market and household-income outlooks remain broadly positive, but higher energy prices, geopolitical tensions and limited shock resilience pose risks.
- Who
- The World Economic Forum and 36 surveyed chief economists.
- What
- The WEF reported that India has the strongest growth outlook among the geographies covered, with favourable expectations for growth, incomes and policy stability.
- Where
- India, compared with other geographies covered by the WEF survey.
- When
- The survey was conducted from August 4 to 20, and its outlook covers the following 12 months; August economic data and the fiscal-year 2026–27 forecast are also included.
- Why
- Resilient domestic demand is supporting growth, while higher energy prices, geopolitical conflicts and global uncertainty remain risks.
Growth and stability
Risks and limitations
Economic momentum
Growth and stability
Economists see India as having the strongest growth outlook among the surveyed geographies, supported by resilient domestic demand and expected increases in real household incomes.
Risks and limitations
Higher energy prices and global uncertainty could weigh on the outlook, while India’s growth momentum does not necessarily mean it has the strongest ability to withstand future shocks.
Policy direction
Growth and stability
Strong growth and inflation within the tolerance band are viewed as consistent with stable monetary and fiscal policies.
Risks and limitations
Twenty-four per cent expect monetary tightening and 22 per cent expect fiscal easing, indicating that some economists foresee policy changes rather than complete consensus.
Investment and resilience
Growth and stability
India remains ahead of China as a preferred business environment for multinational companies, with 40 per cent placing it among their top three destinations.
Risks and limitations
India fell from second to fourth in the previous WEF ranking, and economists rated its shock-resistance capacity as moderate rather than placing it in the highest group.
Key facts
- Survey sample
- The WEF outlook is based on responses from 36 economists surveyed from August 4 to 20.
- Growth expectations
- Seventy-four per cent expect strong or very strong Indian growth over the next 12 months, while 24 per cent expect moderate growth.
- Fiscal-year forecast
- The WEF’s India growth forecast for fiscal year 2026–27 is 6.7 per cent.
- Household incomes
- About 62 per cent expect real household incomes in India to increase over the next year, including 7 per cent expecting a significant increase.
- Inflation
- Consumer inflation rose to 4.8 per cent year-on-year in August, above the 4 per cent target but within the 2–6 per cent tolerance band.
- Policy outlook
- Sixty-seven per cent expect monetary policy to remain unchanged, while 72 per cent expect fiscal policy to remain unchanged.
- Labour market
- Unemployment among people aged 15 and above fell from 5.1 per cent in July to 5 per cent in August, while labour-force participation rose to 55.6 per cent.
- Investment preference
- Forty per cent of economists included India among their top three business destinations, compared with 31 per cent for China.
Quotes
WEF outlook
World Economic Forum outlook summarizing survey expectations
“Strong growth and inflation that remains within the tolerance range are broadly consistent with survey expectations of policy stability”
thehansindia.com
“Growth is expected to remain supported by resilient domestic demand, although higher energy prices continue to weigh on the outlook”
thehansindia.com
Rishi Shah
Partner and economic advisory services leader at Grant Thornton Bharat
“The WEF survey reaffirms our view that India's growth story is resilient and multifaceted. Most importantly, real household incomes are expected to rise, which is a boon for consumption and sets the ground for further investments. However, the economy continues to contend with global uncertainties in the form of continued conflicts and emerging issues on the trade front.”
livemint.com
Sources
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