Johanna Chua, Chief Economist, Asia Pacific, Citi, believes growth in India seems to have bottomed but the problem is that recovery is still slower and subdued than expected.
India specific there seems to be some optimism priced-in that the election outcome could be favourable but it is still premature to tell, she says in an interview to CNBC-TV18’s Latha Venkatesh.
According to her, the worst is over for India and growth is going to rebound gradually. There is also hope that after elections there could be more clarity with regards to reforms, policies etc.
Also read: Not just a hope rally; add to cyclical positions: JPMorgan
Looking at the current account deficit (CAD) one can say that worst seems to be over for India. Also in an environment where taper looks more priced-in, it is providing stability for capital flows of which India seems to be the beneficiary says Chua. Moreover, India is more driven by domestic dynamics.
However, she cautions that one should not get too excited because there still are lots of things that could happen from now upto the elections.
Currency wise for the absolute performance within emerging markets (EMs), Asia probably could be the relative out performer believes Chua.
Answering a query on whether the mood now is turning a bit less negative on emerging markets Chua says the markets outside of Asian region with exception of China have been more volatile.
Although last year there was a big concern on volatility in EMs across asset classes, partly drive by taper concerns that risk now seems to have decreased a bit but there is still a bit of concern about growth, says Chua.
For the entire interview watch video
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