New Delhi, July 19 (SocialNews.XYZ) India’s current account deficit for year 22 year-on-year is expected to widen. Acuite Ratings & Research said.
The rating agency estimates a deficit of around $ 30 billion compared to $ 26 billion for fiscal year 21.
“The forecasted current account surplus in the first quarter of FY22 is not expected to hold up against a backdrop of high commodity prices. Moreover, the gradual reduction in the stringency of the state foreclosure will continue to apply. support the resumption of economic activity, which would give an additional boost to the planned ramp-up of the national vaccination campaign in the coming months. ”
“This should lead to a return of the merchandise trade deficit to normalized levels over the next few months.”
Recent data showed India’s merchandise trade deficit widened to $ 9.4 billion from an 8-month low of $ 6.3 billion on May 21, in a further attempt to normalize after the second wave of the Covid pandemic.
“The expansion of the deficit was led by a pick-up in imports enabled by the gradual unblocking of the economy, with the value of outgoing shipments remaining virtually unchanged from the previous month.”
“Nonetheless, the level of the trade deficit remains below the pre-second wave average of $ 13.7 billion recorded during November 20 and April 21.”
On a quarterly basis, for the first quarter of FY22, the overall trade deficit stood at $ 30.8 billion, a significant increase from $ 9.6 billion for the corresponding period ago a year ; but reduced from the pre-pandemic level of $ 49.2 billion in the first quarter of FY20.
“From a current account perspective, this means India will once again fall into a surplus in the first quarter of FY22, albeit to a much lesser degree compared to the first quarter of the previous fiscal year.”