WEF survey finds global economy stabilizing as fiscal support fades

The global economy is stabilizing after months of deteriorating expectations, but the fiscal firepower that helped governments weather successive crises since 2020 is running low, according to a World Economic Forum survey published Tuesday at the Sustainable Development Impact Meetings in New York.dubaichronicle+1

The September 2026 Chief Economists' Outlook found that 56% of surveyed economists expect the global outlook to remain stable or improve over the next 12 months, a sharp reversal from May, when 89% expected conditions to weaken. The improvement, however, comes with limited confidence that it will hold. Nearly all respondents — 97% — named geopolitical conflicts as a likely source of uncertainty, and 58% expect asset-price corrections.publicnow

Fiscal Support Fading

The report identifies a structural shift in the sources of economic resilience. Since 2020, fiscal support was cited by 69% of economists as the most important factor behind the global economy's ability to absorb shocks. Only 28% expect it to play the same role over the next year.dmarketforces

"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, Head of Economic Growth and Transformation at the World Economic Forum. "The priority now is to strengthen the foundations of resilience before the next shock arrives."dmarketforces

Future resilience is expected to depend instead on flexible supply chains, technological innovation, and energy-market adaptation, with the United States and China seen as best positioned to withstand shocks.dmarketforces

India Leads Regional Growth Outlook

India holds the strongest growth outlook among all regions surveyed, with 74% of chief economists anticipating strong or very strong growth over the next 12 months, up from 52% in May. According to Forbes India News Corp ↘ 2.07%, the survey was completed before India's latest GDP data showed 7.8% growth in the first quarter of FY27, prompting upward revisions from Moody's and several domestic forecasters.forbesindia

Growth prospects have also strengthened for South-East Asia, Central Asia, and the United States. China's outlook has weakened, with about one in three economists expecting weak growth, while Europe remains the weakest region, with 61% expecting weak or very weak performance.dmarketforces

Rising Costs and AI Uncertainty

Household costs are expected to climb, led by food (88% of respondents), electricity (83%), and transport (77%), while real incomes are set to stagnate or fall in most regions outside South-East Asia and India.forbesindia+1

On artificial intelligence, 97% of respondents expect adoption to rise and 69% anticipate meaningful productivity gains. Yet 79% foresee the data-centre build-out facing pushback from local communities, and majorities expect it to raise electricity and water prices without creating large numbers of jobs. The AI race between China and the United States is expected to narrow, with 69% predicting Chinese large language models will close the gap within a year.dmarketforces