A 10-20% chance of 2008-like global crisis in 2026, warns India's Chief Economic Advisor

The Economic Survey 2026 projected three possible global scenarios, each underscoring rising fragility in global trade and finance and shaping the external risks that India may face in 2026.

The best-case scenario is that the uncertainties, geopolitical escalations, trade frictions, and financial stresses that came to define 2025 continue in 2026 and don't get worse. 

Chief Economic Advisor V Anantha Nageswaran assigned a 40–45% probability for a continuation of “business as in 2025”, i.e. a world that remains integrated but increasingly fragile.

The latest Economic Survey also concluded that it was equally likely that the strategic rivalries would intensify and trade would become explicitly coercive, short of a complete meltdown.

Under this outcome, sanctions proliferate, financial stress transmits across borders more easily, and global coordination weakens as institutional buffers thin.

The third scenario, with a lower probability of 10–20%, involves a systemic shock cascade, where financial, technological and geopolitical stresses reinforce one another.

"The macroeconomic consequences could be worse than those of the 2008 global financial crisis," the survey said.

The Survey cautions that such an outcome could trigger macroeconomic consequences more severe than those seen during the 2008 global financial crisis.

However, in all three scenarios, India is relatively better off than most other countries due to its strong macroeconomic fundamentals, but this does not guarantee insulation.

Yet, there's no room for complacency. Even as the survey projected real GDP growth at 6.8% to 7.2% in FY27, the authors warned that India won't be immune to slower growth in key trading partners, tariff-induced trade disruptions and volatile capital flows could intermittently weigh on exports and investor sentiment.

Citing the spike in gold prices, from $2,607 to $4,315 per ounce in 2025, Nageswaran warned that financial markets are already reflecting the fragility of the global order.

Ongoing trade negotiations with the United States, expected to conclude during the year, could help reduce some external uncertainty.

Read more: 'Rupee is punching below its weight', says India's latest economic survey.