New Delhi: India had the strongest growth outlook among the regions covered in the World Economic Forum’s September 2026 Chief Economists’ Outlook, with 98 percent of chief economists expecting at least moderate growth over the next 12 months. However, India fell from second to fourth place in the economists’ ranking of business environments for multinational companies.
Of the 36 economists surveyed, 74 percent expected India to record strong or very strong growth over the next year, up from 52 percent in May. However, only 40 percent ranked India among their top three most attractive business environments for multinational companies, down from 56 percent in the previous survey.
South-East Asia followed India closely, with 73 percent of the economists expecting strong or very strong growth over the next year. The corresponding figure was 44 percent for Central Asia, while 31 percent expected strong growth in the US and none expected very strong growth.
The report noted that India’s growth forecast for FY27 was raised to 6.7 percent in August. It said growth was expected to remain supported by resilient domestic demand, while higher energy prices continued to weigh on the outlook.
The strong growth outlook for India did not translate into greater optimism about its business environment for multinational companies among the economists surveyed. The US topped the ranking, with 77 percent of respondents including it among their top three. It was followed by South-East Asia at 57 percent and Europe at 49 percent, with both moving up one position. China remained fifth at 31 percent.
Europe presented a striking contrast. Despite having the weakest growth outlook among the regions in the survey, it ranked ahead of India in terms of attractiveness to multinational companies.
The economists ranked the regions based on where they expected global companies to find the best mix of large markets, good infrastructure, strong policies and strategic opportunities this year.
The ranking measures business sentiment among the surveyed economists rather than actual investment flows. The report does not conclude that foreign direct investment (FDI) into India is declining, nor does it provide a specific explanation for India’s fall in the ranking. It noted, however, that the Financial Times reported that 10 of the largest global private-equity groups redirected Asian allocations from China towards Japan, India and Australia in the first seven months of 2026.
The change must also be viewed in the context of the survey covering only 36 economists. The September data was based on responses collected between 4 August and 20, while the May edition had 38 responses. Changes between the two editions may therefore partly reflect a different set of respondents.
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Household incomes looking up, inflation expected to ease
Despite the strong growth outlook reflected in the survey, India’s equity markets have not performed well. The report noted that the Nifty 50 was down 7.9 percent since the beginning of the year as of 19 August, pointing to a gap between positive economic indicators and market concerns arising from global shocks.
The economists surveyed also had a relatively positive outlook for Indian households, with 62 percent expecting inflation-adjusted household incomes to rise over the next year. India and South-East Asia were the only geographies where more than 60 percent expected real incomes to increase.
Inflation expectations among the economists had moderated since May, with 55 percent expecting moderate inflation and 45 percent expecting high inflation over the next 12 months. In May, 61 percent had expected high or very high inflation.
The economists did not expect major changes in the labour market, with 70 percent predicting that the unemployment rate would remain unchanged over the next 12 months. While 17 percent expected it to rise, only 13 percent expected it to fall.
India also did not feature among the economies that the surveyed economists considered best prepared for another major shock. While 56 percent rated India’s ability to absorb future shocks as “moderate”, 25 percent rated it high and 19 percent low. China and the US scored better, with nearly 74 percent of economists rating each as having high or very high shock resistance.
Global mood is better, but worries persist
Globally, the outlook among the surveyed economists had become less gloomy. The latest survey showed 56 percent expected the global economic outlook to remain unchanged or strengthen over the next 12 months, compared with 89 percent who expected global economic conditions to weaken in May.
Even so, confidence remained fragile. Nearly 45 percent of the economists still expected global conditions to deteriorate, while only about a quarter expected it to become more resilient over the coming year.
Almost 97 percent of the economists surveyed identified geopolitical conflicts as a top potential risk to the global economy. Asset-price corrections ranked second at 58 percent, followed by rapid technological change and policy instability at 44 percent each.
The economists also expected governments to have less capacity to protect their economies from future shocks. Around 69 percent said fiscal support had driven the global economy’s resilience since 2020, but only 28 percent expected it to play the same role over the next year.
Instead, the economists expected future resilience to depend on flexible supply chains, technological innovation, business adaptability and diversification of energy markets.
“Government support played a critical role in navigating successive crises, but fiscal capacity is likely to be more constrained going forward,” said Attilio Di Battista, WEF’s Head of Economic Growth and Transformation.
For the general public, higher costs were expected to persist despite the improved economic outlook. Almost 88 percent of the economists surveyed expected food bills to rise, 83 percent expected electricity costs to increase and 77 percent expected transport expenses to go up.
(Edited by Chingkheinganbi Mayengbam)
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