India Set to Lead South Asia's Economic Surge, Says WEF Survey

New Delhi, May 29 – According to the World Economic Forum’s latest Chief Economists Outlook report, India is set to lead South Asia’s economic surge in 2025 and 2026. This view is despite the fact that the global economic outlook is witnessing rising uncertainties, policy disruptions, and technological shifts.

The survey was conducted by gathering insights from leading economists across the public and private sectors worldwide. The results reflect strong optimism for South Asia, particularly India.

South Asia: Bright Spot in Global Outlook

According to the analysis, 33% of economists predicted strong or very strong growth in 2025, making South Asia the most promising region. The IMF projects that the largest economy in the region, India, will expand by 6.2% in 2025 and 6.3% in 2026. With this strong forecast, India is expected to be the primary driver of the region’s economic growth.

Despite the optimism, the report also noted inflationary pressures throughout South Asia and increased geopolitical tension in the wake of recent military confrontations between India and Pakistan.

Global Growth Under Strain

Globally, the economic picture is unstable. The report suggests that:

• Muted outlook for China. The economists are divided on its ability to meet its 5% GDP target.
• Resilience in Asia-Pacific. However, it is contrasted by weak prospects in North America.
• Cautious optimism in Europe.

A key concern raised by 87% of respondents was the impact of US economic policy. They believe it is delaying strategic business decisions and increasing recession risks worldwide.

Trade Shocks and AI Disruption Raise Alarms

97% of the economists identified Trade policy as the most unpredictable area, followed by monetary (49%) and fiscal policy (35%).

While 46% of economists expect AI to boost global GDP by up to 5 percentage points in the next decade, 47% think it will lead to job losses.  Top risks associated with AI include:

• Misuse for disinformation and societal destabilisation (53%)
• Concentration of market power (47%)
• Disruption of existing business models (44%)

Policy and Business Response Urged

Amid heightened geopolitical and economic turbulence, 79% of economists believe the world is undergoing a structural shift, not just a temporary disruption. WEF Managing Director Saadia Zahidi stressed the need for coordinated policy action and investment in transformative technologies to ensure long-term growth.

“Policymakers and business leaders must respond to heightened uncertainty and trade tensions with greater coordination, strategic agility, and investment in the growth potential of transformative technologies like artificial intelligence,” Zahidi said.

Mounting Public Debt and Defence Spending

The report also highlighted the fiscal burden of rising defence expenditure, with 86% of economists expecting governments to increase borrowing, which may crowd out vital investments in public services and infrastructure.

While 56% expressed moderate hope for economic improvement over the next year, the overall sentiment remains cautious as the world navigates a landscape marked by volatility, structural changes, and emerging technological forces.