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10-20% chance of 2008-like crisis in 2026, Economic Advisor warns
29 Jan 2026

India's Chief Economic Advisor (CEA), V Anantha Nageswaran, has warned of a potential global crisis in 2026.

The latest Economic Survey projects a systemic shock with a probability of 10-20%, which could have macroeconomic consequences as severe as or worse than the 2008 financial crisis.

The survey outlines three possible scenarios for the future, each highlighting the increasing fragility of global trade and finance.

Three potential global scenarios outlined in Survey
Scenario analysis

The Economic Survey 2026 outlines three potential global scenarios.

The first one, a continuation of the current state where uncertainties, geopolitical tensions, trade frictions, and financial stresses persist without worsening. Nageswaran assigns a 40-45% probability to this scenario.

The second scenario suggests strategic rivalries could intensify and trade could become coercive without a complete meltdown.

Here, sanctions proliferate, financial stress spreads more easily across borders, and global coordination weakens as institutional buffers thin.

Systemic shock cascade
Risk assessment

The third scenario, with a lower probability of 10-20%, involves a systemic shock cascade. In this case, financial, technological, and geopolitical stresses reinforce each other.

The Economic Survey warns that "the macroeconomic consequences could be worse than those of the 2008 global financial crisis."

Despite these potential risks, India is said to be in a better position than most countries due to its strong macroeconomic fundamentals.

India's economic resilience amid global uncertainties
Economic outlook

Despite the potential global crisis scenarios, India's economy is projected to grow at a real GDP rate of 6.8%-7.2% in FY27.

This growth is attributed to strong domestic demand and major infrastructure investments.

The banking sector also remains resilient, acting as a buffer against global shocks.

However, the survey warns of rising risks like volatile gold prices and complex trade talks with the US that could impact growth, capital flows, rupee value, exports, and financial markets if global conditions worsen.