India is expected to be the primary engine of global economic growth in 2025 and 2026, according to a report of the World Economic Forum (WEF), Chief Economists Outlook.
The report, based on a survey of leading economists, cites India's strong economic fundamentals and optimistic outlook despite global uncertainties. WEF said, "India, the region's largest economy, looked set to be the primary engine of growth".
The International Monetary Fund has forecast India's GDP to grow at 6.2 per cent in 2025 and 6.3 per cent in 2026, making it the fastest-growing major economy in South Asia. This robust growth places India at the centre of the region's economic momentum.
The report highlighted that although South Asia is facing some challenges, such as the impact of rerouted Chinese exports, there are positive signs.
For instance, recent purchasing managers' index (PMI) data have shown better-than-expected performance, especially in new export orders, signalling strong demand for the region's goods and services.
The WEF also mentioned that a recently concluded trade agreement between India and the United Kingdom is also seen as a boost to India's trade outlook. Such developments have further strengthened economists' confidence in the region.
Among all global regions, South Asia has emerged as the most promising, with one-third (33 per cent) of economists expecting strong or very strong growth for the rest of 2025.
{{/usCountry}}Among all global regions, South Asia has emerged as the most promising, with one-third (33 per cent) of economists expecting strong or very strong growth for the rest of 2025.
{{/usCountry}}However, the outlook is not without concerns. The recent outbreak of military tensions between India and Pakistan in early May has added uncertainty to the region. In terms of inflation, most chief economists expect moderate (61 per cent) to high (26 per cent) price rises across South Asia in the coming months.
Globally, the economic environment remains fragile. The WEF report noted that the overall condition of the world economy has weakened since the start of the year. One of the major concerns is the shift in US economic and trade policy.
Around 79 per cent of the surveyed economists believe that the dramatic policy changes in the US are part of a long-term structural shift, compared to 61 per cent who held that view in late 2024.
In April, the US announced sharp increases in tariffs on several countries, sparking economic tensions. Although most of these tariff hikes have now been paused for 90 days, the uncertainty over what will follow remains.
Despite the global challenges, the outlook for India and South Asia remains bright, driven by strong economic indicators, trade gains, and growing investor confidence.
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