Also read: 5-6% GDP may be new normal for India: Amansa Capital
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Q: Could you give us an overview of what is happening in the world moneywise, economy wise.
A: If I compare this to lets say a year ago, I feel little bit more confident. May be that is misplaced confidence. If you think about the grey swans as opposed to black swans which you don't know, they are unknown unknowns, these are the known unknowns.
If you think about eurozone, probably little bit better Greek surplus people feel, may be they have pushed it out of their minds but I think we feel little bit better about the state of western Europe certainly the UK is better. We have done very well in the UK that may be more about us than it is about the UK. However I think George Osborne is being vindicated, the Prime Minister David Cameroon has been vindicated and I think labour is in probably a little bit more of a state of disarray than it was 12 months ago. We are still worried about France, France probably has further to fall. Italy is rudderless from a political point of view. Spain there are signs of bottoming out, terribly high unemployment which is socially unacceptable particularly amongst the youth 50 percent unemployment, 25 percent general unemployment and you saw the Catalan's yesterday talking about Scottish independence. So, there are still big problems but we are starting to see some signs of recovery and certainly some investment by US institutions in European stocks. You see Carlos Slim active in KPM, you see Carlos Ghosn hiring in Spain. You see Telefonica doing seeing significant restructuring. So, better signals.
Growth will not be significant even in an Indian context or Russian or Brazilian or Chinese context but it will be better than it was may be say 1-2.5 percent or something like that in due course.
US certainly better the sequester has held the US back but fears about the deficit, fears about USD 16 trillion dollars of debt have receded. I was talking to one of the private equity people just recently and he said underlying economy is probably growing at 2.5-3 percent which ain't bad, it is not BRICS standards but ain't bad.
In terms of other grey swans the Middle East is the biggest problem. It is not just Syria, it is Egypt. I think that is the serious concern. Fears about Syrian attack by the US have probably receded a bit hopefully but generally people are still very concerned about the Middle East.
So, when you put it all together the US deficit concerns have receded, the eurozone has receded, the BRICS hard/soft landing on BRICS Brazil is not a good situation. It is not as good as it was but we are still growing very rapidly there.
Russia I am very bullish about as long as oil p[rice stays roughly where it is may be USD 100, USD 90 may be even little bit less than that. Ofcouse you have got the world cup coming up there, you got the Sochi Winter Olympics, there may be some other big events there and Russia is starting to play an important role politically whether you agree with it or not.
In China it is a soft landing, great confidence in the new leadership there.
Now coming closer to home, people are worried about India. There is a lack of confidence in India at the moment. Certainly the oligarch's that I speak to are very concerned.
The interesting thing to my mind is and I am very bullish about India and remain so, my bullishness is undimmed but there is concern in the short term. Not just pre the election but post the election. Whatever the result is people feel it will be the same stasis may continue after the election. The lack of leadership or lack of strong leadership will debilitate the Indian economy. So, it is a great concern.
Of the BRICS if I was to rank them I would say India is in the weakest position at the moment which is sad because it was certainly a roaring tiger. It is not roaring quite so loudly at the moment. However it doesn't dim my faith. We have a very good business here. Our people are outstanding.
One thing I did notice, I haven't gone into it in detail, younger people here are probably less optimistic. They have lived through an era of strong growth since the 90s. Rupee has been strong, the economy has been strong and people have to be realistic. Things don't go up in a secular line forever, there have to be cyclical oscillations around that secular growth. India is going through a weaker rupee which has advantages in some ways. Inflation is an issue here but generally people are feeling less optimistic and that has an impact on youth and certainly we are seeing Indian's looking at opportunities beyond India which is something that government and business has to worry about.
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Growth won't improve significantly: Martin Sorrell
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