New Delhi: The current account deficit for 2014-15 is expected to narrow down further to 0.9 percent of GDP due to subdued external demand and cooling commodity prices, a report said Tuesday.
According to the research report by leading public sector lender SBI, CAD is expected to narrow down further to below USD 24 billion (0.9 percent of GDP) in 2014-15.
Going forward, the upturn in global demand is not visible in any near future and 2015-16 may also see the CAD widening marginally to 1 percent of GDP.
India's current account deficit (CAD) declined sharply from 4.8 percent of GDP in 2012-13 to 1.7 percent in 2013-14.
Though the last financial year ended with missed export target, but there is optimism about the new Foreign Trade Policy (FTP) targets, the report said.
Merchandise trade deficit for the year ended March 31, 2015, widened by USD 1.3 billion at USD 137 billion despite the windfall gains from lower crude imports.
Government unveiled the much-awaited FTP for 2015-20 on April 1, 2015.
In the next five years, the trade policy aims to increase exports of merchandise and services from USD 465.9 billion in 2013-14 to around USD 900 billion by 2019-20 and to raise India's share in world exports from 2 percent to 3.5 percent.
To achieve the target, exports need to grow by about 15 percent in nominal dollar terms every year, said the report.
According to SBI, comparing the target with the actual performance of the sector, it seems to be "achievable" given possible recovery among trade partners and gathering competitiveness of the domestic product and currency in the international market.
