The world economy is likely to see low growth and high inflation this year and longer due to supply chain issues, commodity prices, and the Ukraine war, said N Chandrasekaran, chairman of Tata Sons, on Wednesday.
It is an exciting time for the economy despite these global issues, he said at the 59th convocation ceremony of the Indian Institute of Technology Madras (IIT-M). “We thought the pandemic was over with the global economy doing well with a high-growth environment, despite high inflation. Then you see a commodity crisis, a supply-chain crisis in semiconductors and war, that certainly affected global growth. We are going to be in a low-growth, high-inflation environment definitely this year and probably longer,” Chandrasekaran told students.
The World Bank last month cut India’s economic growth forecast for the current fiscal to 7.5 per cent owing to rising inflation, supply chain disruptions and geopolitical tensions tapering recovery. In April, it had predicted a growth of 8 per cent.
“We are going to see a digital world and digital economy. The adoption of digital in the last two years demonstrated that it has become behavioural for billions of people. Business in future will have to live with artificial intelligence, data and deeptech.”
Chandrasekaran highlighted India’s economic growth by citing the growth in the number of unicorns, or a startup valued at $1 billion or more. The country clocks at least one new unicorn in a week and the trend is growing. India has more than 100 unicorns.
Chandrasekaran said that healthcare and health technology will play a major role. “Not only will we see basic health problems addressed, we may see research on brains and even ageing problems.” He said that during the initial days of the pandemic, no one would have predicted that vaccines would come within a year.
“Even more than the invention of the vaccine, what fascinates me is the vaccination of people on a global scale. We are coming out of all of this and it is not over.”