WEF survey flags weak 2026 outlook: Global growth seen slowing amid disruption; US tariffs pose challenge for India

The global economy is heading into a phase of weak growth and systemic disruption, the World Economic Forum (WEF) said in its latest Chief Economists’ Outlook released on Tuesday.India, projected by the IMF to grow 6.5 per cent in 2025, continues to be the fastest-growing major economy, but its manufacturing ambitions face hurdles from the newly announced 50 per cent US tariffs on exports—a development weighing on the wider South Asian outlook, PTI reported.According to the survey, 72 per cent of chief economists expect global growth to weaken in 2026, citing intensifying trade disruption, policy uncertainty and accelerating technological change. The report highlighted a shift towards a new economic environment marked by persistent disruption and growing fragmentation.Emerging markets are seen as the key growth engines, with the Middle East and North Africa (MENA), South Asia and East Asia-Pacific identified as bright spots. One in three economists expected strong or very strong growth in these regions.The outlook for China was more mixed, with 56 per cent of respondents anticipating moderate growth, though deflationary pressures are expected to continue. Growth in advanced economies is forecast to remain subdued. In Europe, 40 per cent expect weak growth, while in the US, 52 per cent of respondents anticipate weak or very weak growth.Chief economists also warned of widening divergence between advanced and developing economies, with 56 per cent expecting the gap to grow over the next three years.“The contours of a new economic environment are already taking shape, defined by disruption across trade, technology, resources and institutions,” said Saadia Zahidi, Managing Director, WEF. “Leaders must adapt with urgency and collaboration to turn today’s turbulence into tomorrow’s resilience,” she added.The report noted that the global economy is experiencing one of its most turbulent phases in decades, with a convergence of shocks and structural shifts reshaping growth, trade and governance. “Evidence of change is everywhere. The US has stepped back from its post-war role as a free-market champion, China is flexing its economic muscle, Germany has abandoned fiscal restraint, India has emerged as the fastest-growing major economy and Japan is navigating sustained inflation for the first time in a generation,” it said.Growth expectations for South Asia have softened slightly, with 31 per cent of chief economists now expecting strong or very strong growth in the year ahead, compared to 33 per cent in April. The share expecting moderate growth has risen from 55 per cent to 66 per cent.In India, inflation has eased sharply, giving policymakers more room for stability. The Reserve Bank of India held rates steady in August after consumer price inflation dropped to 1.55 per cent in July, the lowest since 2017, before rebounding to 2.07 per cent in late August.The government remains committed to its 4.4 per cent fiscal deficit target and has rolled out sweeping changes to the goods and services tax regime, the WEF noted.Across South Asia, 64 per cent of economists expect moderate inflation over the next year, 74 per cent anticipate no change in monetary policy, and 80 per cent see fiscal policy remaining steady.