India’s current account, which is usually in deficit, posted a surplus of 1.3% of GDP (USD 13.5 bn) in Q4 FY25.
Download ReportQuantEco Research | Q4 FY25 BoP - Role reversal in current and capital accounts
India’s current account, which is usually in deficit, posted a surplus of 1.3% of GDP (USD 13.5 bn) in Q4 FY25. In contrast, the capital account, which is usually in surplus, recorded a deficit of 0.5% of GDP (USD -5.6 bn). This simultaneous role reversal is unique and unlikely to get repeated. For the full year, the current account remained in deficit, albeit a moderate one, at 0.6% of GDP, marking its lowest level in the post COVID economic recovery phase. Meanwhile, the FY25 capital account surplus shrank to 0.4% of GDP – the lowest in 43 years. As such, the full year BoP registered a deficit of USD 5 bn. Geoeconomic and geopolitical uncertainties and the policy responses thereof will determine the BoP trajectory in FY26. Amidst multiple moving parts, we retain our FY26 current account balance and BoP forecast of -0.8% of GDP (USD -33 bn) and 0.2% (USD 10 bn) respectively for now.