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India Ratings in its latest note has said that it expects the current account deficit (CAD) of India to hit a 36-quarter high of 3.4 per cent of gross domestic product (GDP) or USD 28.4 billion in the June quarter 2022, against a 0.9 per cent surplus a year ago.

It mentioned in the March 2022 quarter, the deficit was a moderate 1.5 per cent or USD 13.4 billion, while in Q1FY22 the current account surplus was USD 6.6 billion or 0.9 per cent of GDP when the country was hit by the second wave of the pandemic. Moreover, it stated as a share of GDP, the current account deficit is expected to jump to a 36-quarter high after the 1QFY14 when it was 4.7 per cent.

In absolute terms, it will be at a 38-quarter high after 3QFY13 when the deficit was USD 31.8 billion. Although merchandise exports touched a record high of USD 121.2 billion in Q1FY23, outward shipments are likely to slow down and come in at USD104.2 billion in Q2FY23, growing by a meagre 1.4 per cent in Q2 due to global headwinds.