Davos 2024: Interest Rates May Not Come Down As Expected, Says EY's Rajiv Memani
Things have not worked out perfectly, but it is not as bad as people thought it would be, he says.
Interest rates around the globe are expected to come down but may not fall at a rate anticipated by the market, according to EY India Chairperson Rajiv Memani.
Rate cuts will be determined by various factors, including inflation, geopolitical issues, economic growth and what happens in China, he told NDTV Profit's Niraj Shah on the sidelines of the World Economic Forum 2024 in Davos.
The interest rates will definitely not reach the levels at which they were earlier, and it will impact the investment decisions of private equity funds and financial advisers, according to the chair of the EY Global Emerging Markets Committee.
The mood was much bearish last year when people were discussing whether there would be a recession or slowdown for a quarter or two quarters, Memani said. "Things have not worked out perfectly, but it is not as bad as people thought it would be," he said. "So, this year, things will start picking up."
Though geopolitical tensions still remain a concern, Memani said it had not been discussed and debated as compared to last year.
Memani said Europe will probably be better than last year, with some pockets like Germany slowing down. "The US feels like it will be slower than last year."
The EY India chairperson underscored that the growth in the Indian markets stood out from its global peers last year, and the story had been reinforced this year, citing a pick-up in manufacturing in India.
Memani said global companies were looking to use India from a supply-chain standpoint. On foreign direct investment, he acknowledged issues around ease of doing business, acquisition of land and approval processes.
"But once they settle in, they can see the benefits of manufacturing."
