Chief Economists Outlook January 2026

South Asia South Asia returns to the top of the regional growth outlook. Two-thirds of chief economists surveyed expect strong (60%) or very strong (6%) growth, a substantial improvement compared to 31% in the September edition. South Asia remains the brightest growth spot among emerging regions, with India anchoring the outlook despite mounting trade headwinds. Despite US tariffs on Indian exports, the Indian Reserve Bank’s recent assessment of a “goldilocks” economy reflected a surge of 8.2% year-on-year real GDP growth in the September quarter alongside near-zero inflation.71 At the same time, India is continuing on its reform pathway by reducing restrictions for employment, and AI adoption is surging alongside investments from US technology firms.72 Over one-third of respondents (36%) anticipate a significant positive impact of AI investments on growth over the next two years. Inflation expectations for South Asia have lowered, with 69% expecting moderate inflation in the year ahead (up from 64% in September 2025) and 28% expecting low inflation (up from 18%). The share of respondents expecting high inflation dropped from 18% to 3%. Over two-thirds of respondents (68%) expect monetary policy to remain unchanged, and 85% of respondents (up from 80% in September 2025) do not anticipate major changes to fiscal policy in the year ahead. Middle East and North Africa The Middle East and North Africa region takes the third place, with about one-third of respondents expecting strong growth and about two-thirds expecting moderate growth. Compared to the previous edition, none of the respondents expect weak growth in the year ahead. Prospects for the Middle East and North Africa have improved, but the region continues to operate in a fraught geoeconomic setting. The IMF projects regional growth to increase by 3.7% in 2026, aided by higher oil output and steady non-oil expansion in the Gulf.73 Growth in the region is significantly affected by the economic performance of Saudi Arabia, pairing strong non-oil momentum with a recalibration of its Vision 2030 ambitions.74 Four in five chief economists surveyed expect fiscal policy in the Middle East and North Africa to remain broadly unchanged in the year ahead. Additionally, the United Arab Emirates anchors regional optimism, supported by Dubai’s role as a financial hub and the prospects of large AI investments by US tech firms.75 A third of respondents anticipate a significant direct impact of AI investments on the region’s growth. In the Middle East and North Africa, inflation expectations have risen slightly. Three-quarters of respondents now expect moderate inflation in the year ahead (up from 60% in September 2025). While the share expecting high inflation has remained almost unchanged, the share expecting low inflation has halved. A large majority of 72% expect monetary policy in the Middle East and North Africa to remain unchanged. Figure 15: Fiscal policy Looking at the year ahead, what is your expectation for fiscal policy in the following geographies? Looser Unchanged Tighter Sub-Saharan Africa 20 64 16 Europe 65 26 9 Latin America and the Caribbean 15 78 7 East Asia and the Pacific 21 71 7 Central Asia 8 88 4 South Asia 15 85 Middle East and North Africa 20 80 United States 65 35 China 71 29 Share of respondents (%) Source: Chief Economists Survey. (November 2025). Chief Economists’ Outlook January 19