WEF Outlook: Global Growth Weakens, India Resilient

The World Economic Forum's latest Chief Economists' Outlook indicates that nearly nine in ten chief economists expect global economic growth to weaken over the coming year, with 94% anticipating a rise in global inflation. This shift from cautious optimism is primarily attributed to the conflict in the Middle East and the closure of the Strait of Hormuz, which is driving up energy and food costs and disrupting supply chains. The impact of the Strait of Hormuz closure is considered more disruptive than last year's tariff turmoil and could approach the severity of the COVID-19 crisis if it persists. The Middle East and North_Africa region is expected to be hit hardest, while India and the United States are projected to remain relatively resilient due to domestic demand and investment. India, in particular, stands out with the strongest growth expectations, though it faces rising risks from the Middle East conflict, evidenced by its central bank shedding USD 40 billion in foreign-exchange reserves to stabilize its currency. Energy price increases are a major concern globally, with Southeast Asia expected to experience the most significant hikes.