India stands out with the strongest growth outlook globally, but has slipped to fourth place in terms of a favourable business environment for multinational companies, a new survey showed on Tuesday. India was ranked second in the previous quarterly Chief Economists' Outlook survey published by the World Economic Forum in May this year. The latest survey found that a majority (56 per cent) of chief economists surveyed expect the global outlook to remain stable or improve -- a sharp improvement from May, when 89 per cent expected conditions to weaken.

The improvement comes with limited confidence that the stabilisation will hold.

Nearly all respondents (97 per cent) named geopolitical conflicts as a likely source of uncertainty over the next year, 58 per cent expected asset-price corrections, and only one-quarter expect the global economy to become more resilient, the WEF said. About India, it said the country continues to have the strongest growth outlook among the geographies covered in the survey.

Of chief economists surveyed from across the world, 98 per cent expected moderate or stronger growth over the next 12 months in India, including 74 per cent who anticipated strong or very strong growth, compared with 52 per cent in May.

The 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," it said.

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The report further said the US leads the ranking of favourable business environments for multinational companies, followed by South-East Asia and Europe (both up one position). India dropped from second to fourth place compared to the last outlook, with only 40 per cent of respondents including it in their top three destinations (down from 56 per cent in May).

China came in fifth with 31 per cent of respondents including it in their top three destinations.

Globally, 97 per cent of chief economists expect AI adoption to rise, but 79 per cent foresee data-centre expansion facing significant backlash, with 61 per cent not expecting significant global job creation, the WEF said. It further found that the AI race between China and the United States is expected to narrow, with 69 per cent expecting Chinese large language models to catch up to their US counterparts in the next 12 months.

Growth prospects have strengthened across most regions but remain uneven, with India, South-East Asia, Central Asia and the United States receiving the strongest assessments, the report said.

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China's outlook has weakened, with about one in three economists expecting weak growth. Europe has improved modestly but remained the weakest region, with 61 per cent expecting weak or very weak growth. Respondents anticipated an increase in the cost of living, led by food (88 per cent of respondents), electricity (83 per cent) and transport (77 per cent).

Most surveyed economists expected real incomes to decrease or stagnate across most regions, apart from South-East Asia and India, where over 60 per cent of respondents anticipate increases. The WEF said the quarterly report builds on extensive consultations and surveys with chief economists from the public and private sectors.  

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