The rise in interest rates has revealed hidden stresses in parts of the banking sector and this could impact global growth in the coming year, according to Tata Group and Tata Motors Chairman N Chandrasekaran.

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In his address to shareholders of Tata Motors in the annual report for 2022-23, he said, "the current year witnessed a surge in inflation requiring coordinated action by most central banks to increase interest rates to control inflationary expectations."

Chandrasekaran further wrote, "While inflation is starting to moderate, the rise in interest rates has also revealed hidden stresses in parts of the banking sector that enjoyed a long run of low-interest rates and hence not prepared for the rate rise. This could impact global growth in the coming year."

Recollecting his last year's message, he said, "recent history has been relentless with the global pandemic, military conflict, growing inequality, supply chain shortages and more." These challenges are resulting in structural shifts in economies and societies, he said, adding, these are continuing to play out.

In the energy transition, Chandrasekaran said the move to green mobility is "irreversible" while the transition for rebalancing supply chains to become resilient is on.

He also pointed out that digital transition — artificial intelligence and machine learning are becoming mainstream. In the talent transition, there is the coming of age of the Talent cloud, a diverse, inclusive, global talent pool that can be accessed remotely.

Chandrasekaran also said the Tata Group is committed to building sustainable businesses.

The group initiative, 'Aalingana' outlines its approach to planet resilience and the "aspiration of net zero by 2045 and the vision of securing the future by innovating today".

He further said Tata Motors has announced its commitment to sustainability targets which include achieving net zero status, promoting a circular economy, and preserving biodiversity.

"As we move forward, Tata Motors will remain focused on executing against its strategy to deliver growth, profitability, and free cash flows consistently," Chandrasekaran said, adding, the company is committed to strengthening its core businesses, accelerating innovation, and unlocking efficiencies while exploring new opportunities for the future.

Stating that Tata Motors is starting to move to a position of strength after overcoming many challenging years, he said, "The upcoming year and beyond are crucial, as it capitalises on the efforts made during this period to achieve a performance that makes us proud." Moreover, Chandrasekaran said, "These next few years mark a significant shift towards a greener and technologically advanced future, necessitating swift and agile action."

(Edited by : Pradeep John)