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Icra Ratings in its latest report has said that with exports continuing to remain under stress for the second consecutive month in November, and imports also falling, the current account deficit is likely to moderate in the second half and close the fiscal with a 3.3 per cent of GDP or USD 108-112 billion, which still be a record high.

It stated falling exports and commodity prices will also help the country print in a moderate CAD at USD 24-26 billion in Q3FY23 from likely high of USD31-34 billion in Q2FY23. Merchandise exports remained flat in November with an on-year growth of 0.6 per cent.  Imports also moderated in November to 5.4 per cent but declined by 1.4 percent month-on-month, aided marginally lower commodity prices.

It mentioned average trade deficit narrowed in October-November from Q2 FY23, auguring well for current account deficit for Q3, but warned merchandise exports are expected to contract in December-March, owing to external slowdown and softer commodity prices.