India’s Q2 FY23 current account deficit widened to a 37-quarter high of 4.4% of GDP
Download ReportQ2 FY23 BoP - Good news in bad news
India’s Q2 FY23 current account deficit widened to a 37-quarter high of 4.4% of GDP while the accompanying net balance of payments position slipped to a deficit of 3.7% of GDP, its weakest since the 2008 Global Financial Crisis. While that appears ominous, the peak discomfort could be behind us. Moderation in commodity prices, traction in service exports, and signs of stability in foreign portfolio investment would render the current account gap tenable from a macro stability perspective. We revise our FY23 current account deficit forecast to 3.1% of GDP (USD 106 bn) from 3.7% (USD 130 bn) projected earlier. From BoP perspective, the magnitude of anticipated deficit gets pruned to 1.1% of GDP (USD 38 bn) from 1.7% (USD 60 bn) projected earlier.