Experts got it wrong in 2025!

My latest piece in BS on some of the great misses of forecasters in 2025. Which, of course, means you have take the forecasts for 2026 with more than the proverbial pinch of salt.

Pundits stumbled badly in 2025

A New Year has begun. With it come forecasts for what we might expect this year. We need to view these forecasts with more than ordinary scepticism. 

Forecasters, in general, have a terrible record; in 2025, they stumbled badly in multiple areas. Just look at what the pundits —economists, military analysts, foreign policy experts and others —predicted during the year or what they failed to foresee. What follows is a limited sample.

Trump’s tariffs and US economic growth

Last April, the International Monetary Fund (IMF) forecast growth of 1.8 per cent for the United States’ gross domestic product (GDP) in 2025 and 1.6 per cent in 2026, down from 2.8 per cent in 2024. Last October, it revised its forecasts to 2.0 per cent and 2.1 per cent, respectively. As everybody now acknowledges, the apocalypse that was forecast for the US ain’t happening.

 Economists are now trying to explain away their misses. The increase in tariffs has not been as high as feared earlier — as though an increase in the weighted average tariff from just under 3 per cent to around 17 per cent is not bad enough. Exporters frontloaded their exports to the US —surely, this should have been anticipated and built into forecasts? The artificial intelligence (AI) boom has obscured weaknesses in the economy —well, US GDP growth of 4.3 per cent in the third quarter of 2025 was driven by consumer spending and exports, not business investment. 

 The real shocker for economists is that the setbacks to the US economy as a result of Donald Trump’s tariffs don’t seem to be materialising in 2026 either, going by current forecasts. Goldman Sachs forecasts US GDP growth of 2.8 per cent for 2026!

India’s GDP growth in FY26

President Trump announced his Liberation Day tariffs last April, with a “reciprocal tariff” of 25 per cent on India. In August, he slapped an additional 25 per cent punitive tariff in response to India’s imports of oil from Russia. Last April, the Reserve Bank of India revised its gdp growth forecast for FY26 downwards to 6.5 per cent from the 6.7 per cent forecast earlier. Following the punitive tariff of August 2025, some private agencies said India’s GDP growth could fall below 6 per cent.

Nobody could have imagined that in a year in which Indian exports to the US faced tariffs of over 50 per cent for more than half the financial year, India’s GDP growth would be 7.4 per cent, higher than the previous year’s 6.5 per cent. Now, many agencies see growth momentum being maintained in FY27 at 7-7.5 per cent. 

Note that no economist or agency had given India any chance of attaining growth of over 7 per cent over a four- or five-year period without it meeting the well-known laundry list of reforms: A fiscal deficit close to 3.3 per cent, privatisation, speedier land acquisition, an overhaul of agricultural laws, hire and fire on a much bigger scale than even the latest labour Codes promise, among others. 

Anti-Indian sentiment in the US

When Mr Trump won the elections in 2024, it was assumed that the India- US relationship would move to an even higher trajectory. The way the relationship has unfolded since has come as a shock to the establishment.   

Pundits used to say that, whatever the equations between the two governments at any point, the people-to-people relationship between India and the US was an underlying positive. That no longer seems true. It appears that that anti-India sentiment in the Trump administration is an aspect of a wider anti-Indian sentiment in the Maga (Make America Great Again) community.  

Several elements have contributed to the souring of sentiments towards Indians.  The misuse of H-1B visas intended for highly skilled persons to ferret out low-cost labour is one factor. The very success of Indians in different walks of life is another: On social media, Americans ask whether the US needs Indians to head corporations such as Microsoft, Google and IBM; and whether a Vivek Ramaswamy is American enough to run for high office Non-resident Indians flaunting their religiosity has evoked angry responses: An 85-foot statue of Hanuman in Texas, the noisy celebrations of Indian festivals in prominent suburbs, etc.  No pundit saw the negativity towards India or the Indian community in the US coming.

Pakistan’s resurgence on the international stage

Pakistan was in the doghouse when Mr Trump returned to office last January. Its resurgence in the world of diplomacy in 2025 was truly remarkable.  

 Following the Pahalgam massacre and the Indo-Pak skirmish of last May, Pakistan did not quite draw any international condemnation. On the contrary, it used the skirmish to restore itself in Mr Trump’s favour by, among other things, repeatedly giving Mr Trump credit for bringing the hostilities to an end. Thereafter, Pakistan’s army chief, General Asam Munir, was welcomed twice to the White House, perhaps a unique first for any serving general. 

In late 2025, the US approved a $686 million package for Pakistan for maintenance of F-16 aircraft sustainment and upgrades of F-16 aircraft. Pakistan also signed a mutual defence pact with Saudi Arabia, something that could not have happened without Washington’s blessings. Pakistan’s Prime Minister Shehbaz Sharif claims with some justification that Pakistan is on good terms with three major powers, namely, China, Russia and the US. The turnaround in Pakistan’s international standing has left foreign policy experts bewildered.

Israel’s dominance of West Asia 

 On October 7, 2023, Hamas launched a surprise attack on Israel. A brutal response from Israel followed. In late 2024, Israel extended its operations in a bigger way in Lebanon. Commentators warned that Hezbollah was not Hamas; it had more than 100,000 missiles at its disposal and had the capacity to raze Israel’s cities. PM Benjamin Netanyahu was leading Israel towards disaster. 

 What the pundits did not know was that Israel had accumulated intelligence on Hezbollah hideouts for its personnel as well as its missiles. Israel proceeded to decapitate the Hezbollah leadership and decimate 80 per cent of Hezbollah’s missile capabilities. The militia is today a pale shadow of its former self. 

 In December 2024, a new front opened in Syria with a rebel outfit moving to topple the Assad regime in days, with the help of Israel and Türkiye. Last June, Israel and the US attacked and substantially incapacitated Iran’s nuclear facilities. Pundits, who had warned that Israel’s PM Netanyahu had over-extended himself, had to eat their words. Israel’s dominance of West Asia increased in 2025. 

There is no dearth of forecasts for 2026. The Epstein files will prove Mr Trump’s undoing (perhaps already proved wrong). Venezuela will turn out to be Mr Trump’s quagmire (looking dicey even now). The Republican Party will lose badly in this year’s US polls, the AI bubble will burst, the full effect of tariffs on inflation in the US will be felt in 2026 (hmmm).  

In Intellectuals, a lengthy diatribe against the cerebral types, historian Paul Johnson writes, “A dozen people picked at random on the street are at least as likely to offer sensible views on moral and political matters as a cross-section of the intelligentsia…. beware intellectuals.” For “intellectuals” one might well substitute “experts”.