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Jahangir Aziz on Budget 2024, fiscal deficit & lack of FPI flows
Jahangir Aziz, Head, Emerging Market Economics at JP Morgan, praises the Indian government's budget consolidation efforts, with the fiscal deficit lower than expected at 5.1%. He emphasizes the need for fiscal consolidation to stabilize India's debt. Aziz believes that the RBI will wait for the Fed to cut rates before doing so itself, as interest rate differentials with the US are currently low. He anticipates that once interest rate differentials narrow, there will be significant portfolio flows into emerging markets, including India, due to low ownership and positioning of emerging market assets.