According to India Ratings, the current account deficit would reach a 36-quarter high of 3.4% of GDP, or USD 28.4 billion, in the June quarter, up from a 0.9% surplus the year before. According to the agency, the deficit in the March 2022 quarter was a manageable 1.5% or USD 13.4 billion, while the current account surplus in Q1FY22, when the nation was struck by the second wave of the epidemic, was USD 6.6 billion or 0.9% of GDP.
After being 4.7% in the 1QFY14, the current account deficit as a percentage of GDP is predicted to increase to a 36-quarter high. After the third quarter of 2013, when the deficit was USD 31.8 billion, it will be at a 38-quarter high in absolute terms, India Ratings stated in a report on Monday. Despite reaching a record high of USD 121.2 billion in Q1FY23, exports of goods are expected to slow down and total USD 104.2 billion in Q2FY23 as a result of global headwinds, expanding by a meagre 1.4% in Q2.
In July, the International Monetary Fund reduced its prior prediction of 3.6% global GDP growth in 2022 to just 3.2%. The research also stated that some of India’s major exporting nations, including the US, the Eurozone, and China, had their GDP predictions reduced lower. This might jeopardise the nation’s goal of exporting USD 750 billion (goods and services) in FY23, the report said.
However, the agency anticipates that imports will continue to grow strongly because of high global commodity prices (Brent crude averaged USD 100.7/barrel in August) and a weak rupee, which it anticipates would average at 79.6 to a dollar in Q2.
Additionally, it is anticipated that goods imports, which increased by 40.5% year over year during the period of July to August 2022 to USD128.1 billion, will increase by 30.3% to USD192.2 billion in Q2FY23, pushing the entire trade imbalance to a new record of USD87 billion in Q2.
Exports of goods increased to USD 121.2 billion from USD 117.0 billion in Q4 FY22 and USD 95.5 billion in Q1 FY22. Exports, which rose at a sluggish 1.9% in July—August 2022, have started to be impacted by the advanced nations’ slowing growth, high prices, and disruptions in the global supply chains.
For feedback and suggestions, write to us at editorial@iifl.com
IIFL Customer Care Number 
IIFL Capital Services Support WhatsApp Number
