The current account balance narrowed marginally to -1.2% of GDP (USD -11.2 bn) in Q2 FY25 from -1.3% of GDP a year ago. The net balance of payments position registered a strong surplus of 2.0% of GDP (USD 18.6 bn) in Q2 FY25
Download ReportQuantEco Research || Q2 FY25 BoP - Smooth sail, but choppy waters ahead
The dynamics over H2 FY25 may not remain so comforting, for a variety of reasons – the pickup in gold imports (though official data may undergo a downward revision) post reduction in custom duties, export momentum reflecting the slowdown in global growth, FPIs tuning net sellers over Oct-Nov-24, and Trump’s re-election exacerbating not just concerns over 2025 global outlook but also keeping investor sentiment somewhat jittery in the near term. Against this backdrop, we maintain our current account deficit forecast of 1.2% of GDP (vs. 0.7% in FY24), underpinned by rising share of services exports. Also, we reiterate our recently revised lower forecast for FY25 BoP to USD 30 bn surplus from USD 50 bn earlier, taking on board Q3 FY25 developments on capital flows.