The widening in India’s current account deficit last year, to 2.4% of GDP, was not as significant as many had feared in the context of the surge in commodity prices. Looking ahead, we think the deficit will narrow over the coming quarters as domestic demand remains relatively subdued and as commodity prices stay well below the highs from 2022. While the rupee will remain on the backfoot in the near-term, the improving external picture should provide a tailwind to the currency further ahead.
EM Drop-In (6th Apr.): Our latest EM online briefing is all about the risks around the recent bank turmoil, including potential economic spill-overs and the state of EM bank balance sheets. Register now.
Subscriber content
Read this in full, free
Start a free trial and use one of your 10 free starter credits to unlock this piece.