Post-Covid inflation is in danger of becoming sticky due to disruption in global energy, food, finance and commodities markets, AIMA president CK Ranganathan said on Tuesday.
Geopolitics only makes matters worse, as “the battle for a ban among the powerful opponents is fueling fears of deficits and inflation expectations,” said Mr Ranganathan, who is also the chairman and director of CavinKare.
Supply chain disruptions during the pandemic and later Russia’s war in Ukraine have pushed up commodity prices. Leading economies such as the US, Europe and Japan are experiencing high inflation, which has increased the prospect of high interest rates.
“However, India has many intrinsic advantages and can use them to meet the challenges of the great uncertainty and change in the world,” said Mr Ranganathan during his speech at AIMA’s National Management Convention.
India’s leaders should be aware of the unpredictability of geopolitical events and policy actions to bring the country’s benefits into play, Mr Ranganathan said.
The key is to focus on India’s sustainable benefits such as a strong domestic economy, geographic size and talent pool, and not get carried away by the concerns about the current instability in the world.
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