KKR Sees Sticky Inflation Amid Global Shocks

Global investment firm KKR anticipates that inflation will remain structurally above consensus expectations in most regions outside China. This forecast is driven by less disinflationary goods inflation and an increase in frequent geopolitical shocks.

Despite near-term challenges such as higher energy prices and AI-related disruptions affecting legacy IT services, KKR maintains a positive outlook on India's long-term growth prospects. The country's consumption story is underpinned by rising incomes, premiumization, financial deepening, and growing demand for higher-quality services.

Globally, KKR observes that the economic cycle is extending due to productivity gains linked to AI, yet inflation remains a concern. Geopolitical fragmentation and energy security further complicate the outlook, leading to a prioritization of resilient supply chains over efficiency.

The firm has also warned that the global monetary easing cycle is losing momentum. By the end of May 2026, the proportion of the world's top 30 central banks still cutting interest rates has decreased significantly.

Asia remains a high-conviction investment opportunity for KKR, fueled by corporate reforms, AI infrastructure spending, and consumption upgrades. The "Security of Everything" theme, encompassing energy, food, and critical supply chains, is creating investment opportunities in infrastructure and strategic assets.