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18 September 2017
 |
| Dollar (The Total Investment & Insurance Solutions) |
India's current account deficit is expected
to widen to 1.5 per cent of GDP in 2017, from 0.6 per cent in 2016, but net
capital flows are expected to more than fund this deficit, says a Nomura
report. The Total Investment & Insurance
Solutions
The Japanese financial services major said
that the wider current account deficit in the second quarter and still-
elevated trade deficit so far in July-August suggest that the current account
deficit is set to widen sharply this year.
Nomura expects current account deficit likely
at 1.5 per cent of GDP in 2017 but noted that funding will not be a constraint.
The
current account deficit increased to USD 14.3 billion, or 2.4 per cent of gross
domestic product (GDP) in the April-June quarter of this year.
On a sequential basis, the CAD widened from
USD 3.4 billion or 0.6 per cent of GDP in the January-March quarter. The Total Investment & Insurance
Solutions
"We expect India's current account
deficit to widen to 1.5 per cent of GDP in 2017, from 0.6 per cent in 2016, but
we expect net capital inflows ? higher net FDI inflows as well as portfolio
investments ? to more than fund the current account deficit," Nomura said
in a research note.
According to official data, net foreign
direct investment stood at USD 7.2 billion in the reporting quarter almost double
from its level in the same period last year.
Net portfolio investment also recorded
substantial inflow of USD 12.5 billion in April-June quarter, primarily in the
debt segment, as compared to USD 2.1 billion in same period last year.The Total Investment & Insurance
Solutions
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