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Below is views on Current Account Deficit By Mr. Veer Trivedi, Research Analyst, Samco Securities

“The Current account deficit witnessed a two-fold jump from 2.2% to 4.4% is mainly on account of a high merchandise trade deficit and an increase in net outgo under investment income. If we look holistically, the government has been able to handle the finances well despite the pandemic and commodity inflation shocks. A robust tax collection and a cooling off in commodity prices have aided the government’s budget. The Fiscal deficit in the pre-pandemic period was 3.4% which shot up to 9.3% in FY21. Although in FY22, it improved to 6.7%, however, a slowing global economy resulted in weaker exports. The upcoming state and general elections are expected to continue to be an overhang on our current account deficit in the short to medium term”.

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