Global growth outlook: India powers South Asia as world’s fastest-growing region; WEF survey sees momentum intact

India is set to continue driving South Asia as the world’s brightest growth region even as a majority of global economists brace for weaker economic conditions in 2026, according to the World Economic Forum’s latest Chief Economists Outlook released on Friday.The survey, published ahead of the annual WEF meeting in Davos next week, shows that while global sentiment has improved modestly since late 2025, uncertainty remains elevated amid high asset valuations, rising debt, geo-economic realignments and the rapid deployment of artificial intelligence, PTI reported.Nearly 53 per cent of chief economists surveyed expect global economic conditions to weaken in the year ahead, compared with 72 per cent in September 2025. At the same time, South Asia has emerged as the strongest regional growth performer, with India playing a central role.“South Asia remains the brightest growth spot among emerging regions, with India anchoring the outlook despite mounting trade headwinds,” the report said.Two-thirds of respondents expect strong (60 per cent) or very strong (6 per cent) growth in South Asia, a sharp improvement from just 31 per cent in the previous edition of the survey.The WEF noted that despite US tariffs on Indian exports, India’s macroeconomic fundamentals remain resilient. The Reserve Bank of India’s recent assessment of a “goldilocks” economy was cited, pointing to 8.2 per cent year-on-year real GDP growth in the September quarter alongside near-zero inflation.India’s reform momentum was also highlighted, with the report noting progress in reducing employment restrictions and a sharp acceleration in artificial intelligence adoption, supported by rising investments from US technology firms.“Over one-third of respondents (36 per cent) anticipate a significant positive impact of AI investments on growth over the next two years,” the WEF said.Inflation expectations in South Asia have moderated, while over two-thirds of economists expect monetary policy to remain unchanged in the year ahead. About 85 per cent do not anticipate major shifts in fiscal policy.At the global level, WEF Managing Director Saadia Zahidi identified three defining trends shaping the outlook for 2026: accelerating AI investment, debt levels approaching critical thresholds with unprecedented fiscal and monetary adjustments, and ongoing trade realignments.“Governments and companies will have to navigate an uncertain near-term environment with agility while continuing to build resilience and invest in the long-term fundamentals of growth,” Zahidi said.The survey also reflected caution on cryptocurrencies, with 62 per cent of respondents expecting further declines after recent volatility, while nearly 54 per cent believed gold may have peaked following its recent rally.Expectations around AI-led productivity gains varied across regions. Roughly four-fifths of economists anticipate productivity improvements within two years in the US and China. The information technology sector is expected to lead AI adoption, with financial services, supply chains, healthcare, engineering and retail identified as fast followers.On employment, two-thirds of respondents expect modest job losses from AI over the next two years, though views diverge over the longer term. Nearly 57 per cent foresee net job losses over a decade, while 32 per cent expect gains as new roles emerge.Regionally, South Asia topped growth expectations with 66 per cent anticipating strong or very strong performance. East Asia and the Pacific followed, with 45 per cent expecting strong growth. The US outlook improved, with 69 per cent forecasting moderate growth, while Europe remained the weakest region, with 53 per cent expecting weak growth.China’s outlook was mixed, with economists split between moderate, strong and weak growth expectations, the report showed.