New Delhi: India's current account deficit is likely to swing to a surplus in the January-March period of this year amid lower oil and gold imports, says a report by Japanese financial services major Nomura.
The current account balance is expected to record a surplus of around $3 billion (0.6 per cent of GDP) in the January-March period of 2016 from a deficit of $7.1 billion (1.3 per cent of GDP) in the October-December quarter of 2015.
"This is largely seasonal in nature, but is also helped by lower oil and gold imports," Nomura said in a research report, adding that if this materializes, it would be the first quarterly surplus in nine years.
Current account deficit narrowed to 1.4 per cent in April-December, from 1.7 per cent in the corresponding period of 2014-15.
Current account deficit, which is the difference between inflow and outflow of foreign exchange, came in at 1.3 per cent of GDP in 2014-15, 1.7 per cent in 2013-14 and a record high of 4.8 per cent in 2012-13.
In the October-December quarter, forex reserves increased by $4.1 billion mainly because of higher FDI flows under the capital account.
From 2007 to 2015, the current account improved by 1.5 per cent of GDP on an average, between January-March and October-December every year.
In 2016, despite weak merchandise exports and a lower services trade surplus, lower oil imports and a sharp moderation in March gold imports (due to a strike by jewellers) helped improve the current account, it said.
"Overall, India should record a large basic balance of payments (current account and net FDI) surplus of around $16 billion (0.8 per cent of GDP) in 2015-16, its largest in a decade," Nomura added.
The current account balance is expected to record a surplus of around $3 billion (0.6 per cent of GDP) in the January-March period of 2016 from a deficit of $7.1 billion (1.3 per cent of GDP) in the October-December quarter of 2015.
"This is largely seasonal in nature, but is also helped by lower oil and gold imports," Nomura said in a research report, adding that if this materializes, it would be the first quarterly surplus in nine years.
Current account deficit narrowed to 1.4 per cent in April-December, from 1.7 per cent in the corresponding period of 2014-15.
Current account deficit, which is the difference between inflow and outflow of foreign exchange, came in at 1.3 per cent of GDP in 2014-15, 1.7 per cent in 2013-14 and a record high of 4.8 per cent in 2012-13.
In the October-December quarter, forex reserves increased by $4.1 billion mainly because of higher FDI flows under the capital account.
From 2007 to 2015, the current account improved by 1.5 per cent of GDP on an average, between January-March and October-December every year.
In 2016, despite weak merchandise exports and a lower services trade surplus, lower oil imports and a sharp moderation in March gold imports (due to a strike by jewellers) helped improve the current account, it said.
"Overall, India should record a large basic balance of payments (current account and net FDI) surplus of around $16 billion (0.8 per cent of GDP) in 2015-16, its largest in a decade," Nomura added.
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