India is likely to see a current account surplus in the March quarter of this financial year for the first time since March 2007 driven by lower oil prices, a Standard Chartered report says.
The global financial services major has lowered the financial year 2015 current account deficit to 0.9 per cent of GDP from 1.5 per cent.
"We expect a current account surplus in Q4 FY'15 for the first time since March 2007 as lower oil prices boost the positive seasonal effect during the quarter," Standard Chartered Economist Anubhuti Sahay said in a report.
The current account deficit (CAD) doubled to USD 8.2 billion or 1.6 per cent of the GDP during December quarter on year-on year basis.
CAD has narrowed to 1.7 per cent of the GDP for the first nine months of the current fiscal, driven down by lower oil prices and higher services exports that offset the dip in merchandise shipments.
Crude prices have more than halved between June 2014 and January 2015. In the December quarter alone crude prices have fallen around 60 per cent.
According to Standard Chartered, there is likely to be a larger BoP surplus of USD 53.7 billion in FY15 as against the previous forecast of USD 35.6 billion.
The current account deficit is likely to be "narrow" in FY15 and is expected to widen from FY16 onwards, "albeit at a gradual pace", the report said.
"We forecast a surplus of USD 6.8 billion, the largest since 1991. This will likely result in a narrower C/A deficit of USD 19.50 billion (-0.9 per cent of GDP) in FY15, lower than our previous estimate of USD 30.6 billion (-1.5 per cent)," the report said.
CAD, the difference between the inflow and outflow of foreign exchange, was 1.7 per cent of GDP (USD 32.4 billion) in 2013-14. It was at a record high of 4.7 per cent (USD 88 billion) in 2012-13.
