Current account may turn surplus in FY21

by mehekkaoberoi
  • India’s current account could show a surplus this year for the first time in several years, economists said, following a sharp decline in domestic demand for investment and consumption goods. The slump in crude and commodity prices and lower demand for them are also contributing to the decline in imports. The surplus is expected to be $19-20 billion in FY21, or around 0.7% of GDP.
  • The last time India had a current account surplus was in FY07.
  • The current account deficit has traditionally been regarded as a weakness but experts see a bigger problem in a surplus as it stems from demand destruction due to the economic slump caused by the Covid-19 pandemic and the lockdown.
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