India continues to have strongest growth outlook: Chief economists in WEF report

New Delhi: India continues to have the strongest growth outlook among the geographies covered in the latest World Economic Forum (WEF) outlook and among the chief economists surveyed, 98 per cent expect moderate or stronger growth over the next 12 months, including 74 per cent who anticipate strong or very strong growth for India, compared with 52 per cent in May.

India’s growth forecast for fiscal year 2026–27 was raised to 6.7 per cent in August, reflecting continued resilience in domestic demand.

“Growth is expected to remain supported by resilient domestic demand, although higher energy prices continue to weigh on the outlook,” according to the WEF report.

Inflation expectations have moderated since May, with 55 per cent of chief economists expecting moderate inflation and 45 per cent expecting high inflation over the next 12 months, compared with 61 per cent expecting high or very high inflation in May.

Consumer price inflation increased to 4.8 per cent year-on-year in August, moving above the 4 per cent medium-term target while remaining within the 2–6 per cent tolerance range.

The outlook further stated that a majority (67 per cent) of respondents expect monetary policy to remain unchanged, while 24 per cent anticipate tightening.

The policy rate was kept at 5.25 per cent in August, alongside a neutral policy stance. Fiscal policy is also expected to remain broadly stable, with 72 per cent anticipating no change and 22 per cent expecting looser policy.

“Strong growth and inflation that remains within the tolerance range are broadly consistent with survey expectations of policy stability,” said the outlook.

However, equity market performance has been less buoyant, with the Nifty 50 down 7.9 per cent since the start of the year ((as of August 19).

On unemployment, 70 per cent of chief economists expect no change over the next 12 months, while respondents are similarly divided between an increase (17 per cent) and a decrease (13 per cent).

The unemployment rate among people aged 15 and above declined to 5 per cent in August from 5.1 per cent in July, while labour force participation increased from 55.4 per cent to 55.6 per cent during the same period.

These developments point to relatively stable labour market conditions alongside strong activity, although sustained employment creation remains important, said the WEF survey.

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