India's July-September current account balance $-19.1 bln

Friday,   07-Dec-2018   05:50 PM (IST)

High oil prices pushed India’s current account deficit in July-September to its widest in over four years, according to data released by the central bank on Friday. However, the current account deficit is likely to fall due to a sharp drop in crude prices that will take pressure off a depreciating rupee, analysts said. The current account deficit in July-September hit 2.9 percent of gross domestic product or $19.1 billion, the highest since April-June quarter of 2013. In July-September 2017 the current account deficit was $6.9 billion or 1.1 percent of GDP, Reserve Bank of India data showed. India’s trade deficit in July-September widened to $50 billion from $32.5 billion a year ago. Overall, India’s balance of payments was in deficit to the tune of $1.9 billion in the September quarter, compared with a surplus of $9.5 billion a year ago. The bank has lowered its current account deficit projection for the full fiscal year 2018/19 to 2.3 percent of GDP from 2.9 percent, while balance of payments deficit is expected to be at $12 billion, Rao said. Oil prices have slumped by more than 30 percent since early October, pressured by concerns supply will exceed demand in 2019 as economic growth slows. India imports two-thirds of its oil needs and the sharp oil price fall will reduce its trade deficit, ease inflation and boost the rupee and improve overall macro-economic fundamentals, according to analysts.