More pain ahead as current account deficit widens
SummaryWhile imports face upside pressures, exports may continue to underperform amid subdued global growth dynamics. Resilient domestic economic growth, nascent recovery in capex cycle and festival spending should drive import demand.
The latest balance of payments data is far from inspiring. India’s current account deficit (CAD) for the June quarter (Q1FY24) has widened to 1.1% of gross domestic product (GDP) from 0.2% in the March quarter. The deterioration is broad-based with worsening goods trade deficit and drop in services surplus as well as remittances from abroad.