Get All Access for $5/mo

India's BoP Is Likely To Slip Into Deficit Of $40-$50 Billion: Report The International Monetary Fund has estimated India's FY23 current account deficit (CAD) at $121 billion or 3.5 per cent of GDP

By Teena Jose

Opinions expressed by Entrepreneur contributors are their own.

You're reading Entrepreneur India, an international franchise of Entrepreneur Media.

Pexels

India's Balance of Payments (BoP) has likely to slip into a deficit of $40 to $50 billion in the current fiscal year, as per an internal assessment by the finance ministry. As per reports, it stood surplus at $47.5 billion in FY22. The BoP is likely to be deficit because of the slumbering goods trade inconsistency.

A senior finance ministry official, in a news report was quoted as saying, "The balance of payments will remain in deficit this year. Assuming no further major shocks going forward, the shortfall will be $45 to $50 billion this fiscal year, the initial estimation shows."

BoP is a statement of all transactions between entities in one country and the rest of the world over a period of time. It is also known as balance of international payments.

India had a merchandise trade deficit of $148 billion in the first half of FY23. The International Monetary Fund (IMF) has estimated India's FY23 current account deficit (CAD) at $121 billion or 3.5 per cent of GDP. According to reports, in the fourth quarter of FY22, India's current account deficit slipped to $13.4 billion from $22 billion in the previous quarter. But it grew more than 60 per cent from $8.1 billion in the fourth quarter of FY21.

In FY22, India's CAD stood at $38 billion which is the highest since FY19 of $57 billion. The rise was reported to be because of a strong inflationary environment that led to a rise in the value of imported goods of $189 billion, the highest since FY13 of $196 billion.

"This is a challenging year globally and we will have our own shocks. However, we are still in a comfortable position, and this BoP deficit can be comfortably managed. The pressure on the local currency is likely to continue for some time but a clearer picture will emerge next month. The rupee will be under some strain. However, by mid-December there will be more stability," said the official in a statement.
Teena Jose

News Desk Reporter with Entrepreneur India

Teena is a post graduate in financial journalism. She has an avid interest in content creation, digital media and fashion.
News and Trends

Hyundai Motor Could be India's Biggest-Ever Initial Public Offering Worth $3 Billion: Report

Hyundai Motor expects a potential $3 billion as an Initial Public Offering (IPO), surpassing the previous record of $2.46 billion raised by India's life insurance.

Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.

News and Trends

Why India Inc's Revenue Growth Is Estimated To Slow Down In Q1FY25

Credit rating agency, ICRA, expects the sequential revenue growth for Indian corporate to slow down in Q1 FY2025. However, the operating profit margin (OPM) will remain steady in the range of 15-18 per cent, despite the expected tapering in revenue growth

News and Trends

AI App 'PadhAI' Clears UPSC Exam; Scores 170 out of 200 in Prelims-2024

This places PadhAI among the top 10 scorers nationally and possibly even in the first position, far surpassing the typical qualifying score, which usually gains below 100

Social Media

Five Indian film producers are exploring business beyond cinema

Very recently, the Ahmedabad-based ice cream brand Hocco raised funds, and among many, they have two angel investors from Bollywood: Farhan Akhtar and Ritesh Sidhwani. From Karan Johar to Alia Bhatt, Rana Daggubati to Ronnie Screwvala, there are film producers who are expanding their horizons as business visionaries by investing in different sectors. Here we take a look at some of such personalities.