India is set to be the main engine of global economic growth in 2025 and 2026, according to the World Economic Forum’s (WEF) Chief Economists Outlook report. The report, which surveys leading economists, highlights India’s strong economic fundamentals and positive outlook despite ongoing global uncertainties. “India, the region’s largest economy, looked set to be the primary engine of growth.” WEF stated, quoted ANI. The International Monetary Fund (IMF) projects India’s GDP growth at 6.2 percent in 2025 and 6.3 percent in 2026, positioning it as the fastest-growing major economy in South Asia. This robust growth makes India central to the region’s economic momentum.While South Asia faces challenges such as the impact of rerouted Chinese exports, the report notes encouraging signs. Recent purchasing managers’ index (PMI) data show better-than-expected performance, particularly in new export orders, indicating strong demand for goods and services in the region.The WEF also pointed out that the recently concluded trade agreement between India and the United Kingdom has bolstered India’s trade outlook, further strengthening economists’ confidence in the region.Among global regions, South Asia stands out as the most promising, with one-third (33 percent) of economists forecasting strong or very strong growth for the remainder of 2025.The outbreak of military tensions between India and Pakistan in early May has increased uncertainty in the region. Additionally, most chief economists expect inflation in South Asia to range from moderate (61 percent) to high (26 percent) in the coming months.On a global scale, the economic environment remains fragile. The WEF report highlights a weakening of the world economy since the beginning of the year, with particular worry over shifting US economic and trade policies.About 79 percent of surveyed economists view the recent dramatic US policy changes as part of a long-term structural shift, up from 61 percent in late 2024.In April, the US implemented sharp tariff increases on several countries, escalating economic tensions. Although most of these tariffs have been paused for 90 days, uncertainty about future actions persists.Despite global challenges, the outlook for India and South Asia remains positive, supported by strong economic indicators, trade gains, and growing investor confidence.
