India, Other EMs To Outshine Global Peers In 2026? Renowned 2008 Market Crash Predictor Makes Bold Claim

The global economy awaits a slowdown going into the new year, 2026, with the key advanced economies showing signs of weakness, according to Jim Walker, Chief Economist, Aletheia Capital. Walker, one of the global economists who accurately projected the 2008 financial crisis, believes that the outlook for 2026 is ''not very good'' for the global economy.

In an exclusive interaction with NDTV Profit on Wednesday, Dec. 31, Walker said that he is expecting a slowdown in the US, Europe, and UK in 2026. ''Inflation remains a problem even as economy slows down,'' he said. Walker forecasts that emerging markets such as India and China have to do the business themselves and get the domestic economy stimulated.

According to Walker, as many of the data sets in the US were delayed because of the government shutdown in late 2025, which eventually weighed on key investment decisions by major multinational firms. Many companies paused investments due to tariff-related uncertainties.

''The US GDP rose at a 4.8% annualised growth rate. However, people only look at headline number and think everything is pretty good. However, investment is key to any economy. Investments in the US were flat on a sequential basis and only up 1% on a year-on-year basis,'' said Walker.

According to the economist, the US GDP indicators suggest that the economy is heading into a weak 2026. The rising government debt levels in advanced economies are a major concern for global markets. The ongoing macroeconomic uncertainty will weigh on pending investment decisions.

In the US and UK, the government debt-to GDP ratios are above 100%. Most institutions are also projecting a weaker 2026 in terms of growth. US is also heading towards a recession, according to Aletheia Capital.

Jim Walker believes despite the slump in 2025, the Indian equity market remains one of the most attractive in the world and that the new year, 2026, is expected to be stronger for the Indian economy. ''The focus will be on getting the domestic economy back up and running. A stringer year will make it easier for businesses to perform,'' said the economist.

According to Aletheia Capital, the Indian economy is likely to grow at a rate of 7.8% or higher in 2026, driven by appropriate interest rate levels, and strong government spending. Coming to Asia, Walker believes that the other EMs are better placed than advanced economies for 2026 and may perform better than the global peers. However, the economist said Japan's growth is expected to be 0.6% in 2026, implying a slowdown.