JP Morgan Strategist: India to ‘Overperform’ in 2010
Sept. 15 – Adrian Mowat, JPMorgan’s chief equity strategist for Asia and emerging markets says he expects a sharp recovery in world economic growth during an interview with The Economic Times.
Mowat said that low interest rates would give a fillip to urban consumption, helping offset the impact of drought caused by the poor performance of the 2009 monsoon. In excerpts from an interview carried by The Economic Times, he made the following comments about India:
“We recently upgraded India, and going into 2010, I see India as an outperformer, primarily driven by the end to the credit crunch. India is an economy that needs to import capital to grow rapidly. India has a lot of capital needs, infrastructure needs, supply-side needs, which are very sensitive to the long-term cost of funding.”
“Last year, we watched the credit default swaps on Indian banks rise rapidly. The availability of credit basically disappeared. That’s now reversing very rapidly. So, India gets the benefit of the decline in global interest rates, the end of the credit crunch. If you look at Indian policy rates, they are below 5 percent, an extraordinary number. So, the domestic economy is benefiting from monetary stimulus.”
“If I look at inflation, measuring it by the wholesale price index, it is negative. So, the urban consumer is in a very favourable position. I do understand that the inflation numbers are more complex than that in India. But I have got, in theory, less cost pressure; plus I have got low interest rates, which all help urban consumption.”
His full interview also with commentary on world recovery and markets, can be accessed here.
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