Companies will need to be prepared for various possibilities in terms of how inflationary trends shape up over the next 2-3 years depending on the macroeconomic conditions, Hindustan Unilever MD and CEO, Sanjiv Mehta said on Tuesday.
Stating that the “unprecedented inflation” is not “homegrown”, he attributed various macro-economic factors that have fuelled inflationary trends including Covid-related supply chain disruptions, high fiscal spending by the developed world and the Russia-Ukraine conflict that led to massive increase in energy and food prices.
‘Massive global issue’
Speaking at the FICCI LEADS 2022 event, Mehta pointed out that earlier inflationary pressures were seen in just one or two commodities but this time, elevated levels of inflation have been felt across a range of commodities making it a “massive global issue”.
Responding to a query on whether inflation will come down in the coming days, Mehta said it’s difficult to predict but companies will need to be prepared for three possibilities. “One is that inflation or a slight deflation will continue at a moderated pace from the elevated base today. The second is, it could go up even further. And the third is, there could be a deflation in the commodity prices. This is looking at 2-3 years horizon and businesses will need to be ready for each of these scenarios,” he added.
Meanwhile in a video address at the inaugural session of the FICCI event, Unilever global CEO, Alan Jope, pointed out the key challenges of climate change and inequality. He added, it is estimated that disruptions due to rising temperatures could cost companies $1.3 trillion by 2026, and result in the loss of 80-million jobs. “We have really reached a point where the cost of inaction is far higher than cost of acting,” he said.