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Nearly nine out of 10 economists surveyed by the World Economic Forum expect global growth to weaken in the coming years.
The report says conflict in the Middle East and the closure of the Strait of Hormuz have disrupted supply chains, raised prices and increased uncertainty.
Despite weaker global sentiment, 58% of respondents said a global recession is not imminent.
Growth expectations remain moderate to high for India and the US, supported in part by investment and consumption.
India stands out with the strongest growth expectations, but faces risks from inflation, rupee pressure, urban unemployment and the Middle East conflict.
Nearly nine out of 10 economists believe global growth is set to weaken in the coming years, according to a survey conducted by the World Economic Forum.
“The escalation of conflict in the Middle East, including the closure of the Strait of Hormuz, has disrupted global supply chains, elevated prices for affected goods and significantly increased uncertainty and volatility,” the report said.
But a global recession is still some way off and not imminent, according to 58 per cent of respondents surveyed in the Chief Economists’ Outlook report for May 2026.
The outlook comes at a time when global trade had reached an all-time high, growing by 7.5 per cent in 2025, before the blockade of the Strait of Hormuz created fresh disruption. Chief economists already assess the current closure of the Strait of Hormuz as having a greater impact than the 2025 tariff turmoil, the report said.
If the status quo remains unchanged in the Strait, the “impact on the global economy is expected to approach levels last seen during the COVID-19 pandemic”.
“The longer the disruption lasts, the heavier the long-term cost for those who can least afford it,” said Sahida Zaidi, managing director of the World Economic Forum.
The report also observed that a vast majority of economists — more than 90 per cent of respondents — believe adoption of artificial intelligence will increase in 2026.
However, economists also said expectations about the speed and breadth of productivity gains are moderating, with broader benefits expected to take longer to materialise than earlier forecasts by the community had suggested.
While global growth sentiment remains weak, growth expectations remain “moderate to high” in the United States and India, supported in part by investment and consumption, but also facing inflationary pressure.
In India’s case, the survey results show the country stands out with the strongest growth expectations. However, “while the economy still remains resilient and growth for 2026-27 is projected at 6.5 per cent, it faces rising risks from the conflict in the Middle East [West Asia]”, the report warned.
With the rupee progressively weakening, “depreciation pressures have forced the central bank to shed $40 billion in foreign-exchange reserves in March to stabilise the currency”, the report observed. On employment, 70 per cent of respondents expect moderate or stronger employment growth over the next 12 months.
However, unemployment rose to 5.1 per cent in March from 4.1 per cent, “mainly because of a rise in urban joblessness, while labour-force participation also edged lower”, according to the Periodic Labour Force Survey bulletin for March 2026.
Inflation remains a concern for India, with 61 per cent of respondents expecting high or very high inflation over the next 12 months.
