India’s Quarterly Economic Outlook - Current Account Deficit Could Widen To 5.5% Of GDP In Q2: Motilal Oswal

India’s Quarterly Economic Outlook - Current Account Deficit Could Widen To 5.5% Of GDP In Q2: Motilal Oswal

<div class="paragraphs"><p>A container terminal. (Source: Unsplash)</p></div>
A container terminal. (Source: Unsplash)

BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. 

Motilal Oswal Report

The continuation of hostilities between Russia and Ukraine has led to an entrenched episode of higher inflation across the globe. However, commodity prices have come off sharply from their peaks with renewed concerns on global growth, led by strong monetary tightening that is likely to continue at least until December 2022.

At this juncture, India seems isolated from the high inflation-slow growth challenges. Nevertheless, this isolation will fade over the next few months. We believe that growth concerns will emerge everywhere, including India, in CY23/FY24E, limiting rate hikes and reversing the current narrative. 

Although we have raised India’s FY23E real gross domestic product growth to 6.8%, we have kept our FY24 projection broadly unchanged at just 5.5%, much lower than the consensus of 6.3%. A serious global recession presents a downside risk to our below consensus growth forecast.

At the same time, we have cut our FY23 consumer price index inflation forecast to 6.7% (from 7.0% earlier), keeping FY24E unchanged at 5.2%.

India’s external situation has also worsened quickly. We expect current account deficit to widen to 3.7% of GDP in Q1 FY23 and peak at 5.5% of GDP in Q2 FY23, implying a decadal-high CAD at 3.8% of GDP in FY23.

Click on the attachment to read the full report:

Motilal Oswal India Economy Watch CAD.pdf


This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.