Logo

India Set to Drive Global Growth in 2025 and 2026, WEF Report Finds

The World Economic Forum's Chief Economists Outlook identifies India as the primary engine of growth in 2025 and 2026, amid a mixed global economic climate. While North America faces weak prospects, South Asia remains robust, with India expected to grow over 6% annually. Global risks include trade shocks, rising public debt, and AI-driven job disruptions.

India Set to Drive Global Growth in 2025 and 2026, WEF Report Finds

The World Economic Forum's latest Chief Economists Outlook report highlights India as the primary engine of economic growth in 2025 and 2026, reflecting strong optimism for South Asia amid a challenging global economic environment.

While the global growth outlook remains mixed—with softness in North America, cautious optimism in Europe, and resilience in the Asia-Pacific—the report underscores South Asia's robust prospects. Approximately one-third of chief economists surveyed expect strong or very strong economic expansion in the region for the remainder of 2025.

Despite concerns such as recent military tensions between India and Pakistan and inflationary pressures, South Asia continues to stand out. India, the region's largest economy, is projected by the International Monetary Fund to achieve GDP growth of 6.2% in 2025 and 6.3% in 2026, reinforcing its status as a key growth driver.

Global economic risks include trade policy shocks, rising economic nationalism, and disruptions from artificial intelligence (AI). Nearly 87% of economists anticipate that current U.S. economic policies may delay strategic business decisions and contribute to recession risks worldwide.

The report also notes mounting public debt concerns as governments address increased defense spending through higher borrowing, potentially restricting investment in infrastructure and public services. Furthermore, 47% of chief economists foresee net global job losses caused by AI over the next decade, despite its substantial growth potential.

WEF Managing Director Saadia Zahidi emphasized the necessity for policymakers and business leaders to adopt coordinated strategies and invest in transformative technologies to navigate uncertainties effectively and ensure sustainable growth.

In summary, while global economic uncertainties persist, particularly regarding trade and fiscal policies, India’s strong growth forecast positions it as a pivotal contributor to future global economic expansion.

Pakistan’s Public Debt Doubles in Four Years, Reaching PKR 76 Trillion
Pakistan’s Public Debt Doubles in Four Years, Reaching PKR 76 Trillion

Pakistan’s public debt has escalated dramatically, reaching PKR 76 trillion—a doubling since 2020–21—deepening the economic crisis. Despite slight improvements in debt-to-GDP ratio and foreign reserves, the country faces mounting interest burdens and dependency on IMF support. Leadership acknowledges the urgent need for structural reforms to restore fiscal stability.

Rupee Volatility May Rise Post US Tariff Pause Expiry, Experts Warn
Rupee Volatility May Rise Post US Tariff Pause Expiry, Experts Warn

With the upcoming expiration of the U.S. President's 90-day tariff pause, the Indian rupee's recent stability may give way to greater volatility after the first half of fiscal 2026. MUFG predicts an appreciation to 83 per dollar with a potential trade deal, while Indian analysts expect fluctuations between 84-86 per dollar, emphasizing increased volatility starting September. RBI's actions will be crucial in managing these trends.

Japan’s Rising Bond Yields Raise Fears of Capital Outflows and Market Volatility
Japan’s Rising Bond Yields Raise Fears of Capital Outflows and Market Volatility

Yields on Japan’s long-term government bonds have reached near-record highs, fueling fears of capital repatriation by Japanese investors from the U.S. and potential disruptions in global financial markets. Experts warn that rising yields and a strengthening yen could unwind the yen carry trade, impact U.S. equities, and tighten global liquidity conditions. While some foresee a gradual adjustment, the evolving bond market dynamics warrant vigilant observation given their broad economic implications.

Australia's Consumer Inflation Steady in April with Rate Cuts Expected
Australia's Consumer Inflation Steady in April with Rate Cuts Expected

In April, Australia's consumer inflation rate remained stable at 2.4% year-over-year, with increased health and holiday expenses balanced by lower fuel costs. Core inflation measures stayed within the Reserve Bank's target range of 2-3%. The resilient labor market and slowing rent growth bolster expectations for potential interest rate cuts in July amid ongoing global economic uncertainties.

US Holds Over One-Third of Global Millionaires and Billionaires in 2024
US Holds Over One-Third of Global Millionaires and Billionaires in 2024

The United States holds more than a third of global millionaires and billionaires, boasting over 6 million liquid millionaires and 867 billionaires. Fueled by robust tech and AI industries, US millionaire populations grew 78% over the past decade. Key wealth centers include New York, the Bay Area, and emerging hubs in the Sunbelt, while immigration contributes to this wealth surge.

U.S. Credit Default Swaps Surge Amid Debt Ceiling Concerns, Panic Likely Overblown
U.S. Credit Default Swaps Surge Amid Debt Ceiling Concerns, Panic Likely Overblown

Investors are increasingly purchasing credit default swaps to insure against potential U.S. government debt default amid unresolved debt ceiling issues. CDS spreads on U.S. government debt have surged to near two-year highs, reflecting political risk rather than genuine default fear. Analysts predict this spike is temporary as Congress works toward a budget deal before July to raise the debt limit. The U.S. government is expected to avoid default as it has in prior crises, though fiscal challenges remain prominent following Moody's recent credit rating downgrade.

South Korea Cuts Interest Rates Amid Sluggish Economy and Trade Tensions
South Korea Cuts Interest Rates Amid Sluggish Economy and Trade Tensions

South Korea's central bank reduced its key interest rate to 2.5% and slashed the 2025 growth forecast to 0.8% to counter economic headwinds. Ongoing US tariff policies and political unrest following former President Yoon’s ousting have weakened domestic demand and trade prospects. Despite market gains, challenges remain as the country navigates global trade disputes and internal political shifts.

India to Lead Global Economic Growth in 2025 and 2026: WEF Report
India to Lead Global Economic Growth in 2025 and 2026: WEF Report

According to the World Economic Forum, India will be the primary engine of global economic growth in 2025 and 2026, with the IMF projecting GDP growth rates of 6.2% and 6.3%, respectively. Strengthened trade ties, particularly with the UK, and robust purchasing managers' data underpin this outlook. While regional tensions and inflation present risks, overall confidence in India's economic trajectory remains high amid a fragile global economic environment.

Seven Dead as Migrant Boat Capsizes Near Spain's Canary Islands
Seven Dead as Migrant Boat Capsizes Near Spain's Canary Islands

A migrant boat capsized near La Restinga, El Hierro, in Spain's Canary Islands, killing seven people—four women and three girls. Rescue operations continue as dozens are missing. The incident underscores the perilous nature of the Atlantic route migrants take from West Africa, with thousands dying annually during the crossing. The Canary Islands face immense pressure from increasing migrant arrivals.

Elon Musk Criticizes Trump’s Spending Bill Citing Increased Budget Deficit
Elon Musk Criticizes Trump’s Spending Bill Citing Increased Budget Deficit

Elon Musk expressed disappointment over President Trump's latest multi-trillion dollar spending bill, warning it will increase the budget deficit. The 'One Big Beautiful Bill Act,' passed narrowly in the House, aims to extend tax cuts and reduce safety net programs. Despite White House optimism on economic growth and deficit savings, analysts forecast a $4 trillion deficit increase over a decade.