Why Daiwa Capital’s Kitney Is Overweight India

Paul Kitney discusses India's economic outlook, highlighting its superior growth profile compared to the region, with a projected earnings growth of 20%. Despite a valuation premium, India benefits from significant monetary policy flexibility, allowing for potential rate cuts without undermining the currency. The correction in oil prices positively impacts India's current account. However, risks such as geopolitical tensions in Kashmir and issues with non-bank financial corporations remain. The Reserve Bank of India (RBI) can continue rate cuts, but the effects on the economy are yet to be fully realized. Macroprudential rules are being strengthened to ensure financial stability.

How does the current account balance impact India's economic situation?

What factors might delay the effects of rate cuts on the economy?