Today’s world economy is marked by volatile financial markets, high interest rates and geopolitical tensions. Both the global and the Indian economy face heightened uncertainty as market fluctuations and policy shifts redefine economic interactions.

At recent India CEO Forum sessions in Delhi and Mumbai, Adit Jain, IMA’s Chairman and Editorial Director, highlighted some key economic risks and opportunities, emphasising the need for strategic planning to navigate market volatility and geopolitical challenges. This podcast summarises these discussions.

The impact of US monetary policy spreads across the entire global economic architecture. Fund flows to emerging markets are directly proportional to interest rate differentials. This is logical, as investors seeking higher returns, move funds out of the United States. More recently, the Reserve Bank of India defied market hopes, leaving interest rates unchanged. Logically, therefore, we should expect greater stability in the value of the rupee, as in the values of the other emerging market currencies. The half per cent point reduction now places the Fed fund rate to be between 4.75% and 5%. The shift in the Fed’s stance towards monetary easing, suggests that inflation is firmly under control, or so the central bank would like to believe.

This podcast explains.

Sri Lankans, exasperated with corruption and crony capitalism amongst the ruling and business elite, voted for fundamental change. This constituted the basis of the support that drove the victory of Anura Kumara Dissanayake, an outsider from a Marxist political party, in the recently concluded presidential elections. Mr Dissanayake promised to renegotiate the terms of the IMF bailout, eliminate corruption and bring back money siphoned offshore by the previous ruling family – the Rajapaksa. Despite these endearing promises, Mr Dissanayake’s ability to deliver is either limited or completely lacking.

Clearly, India may have been better-off with a Premadasa victory, as relationships with him and his party are believed to be strong. Be that as it may, Mr Dissanayake may quickly discover that things are quite different when you are in government and actually have to make compromises vis-a vis as an activist.

This podcast explains.