Rising global commodity prices will shave a lot off the current account leading to higher imports and a rise in current account deficit, which is likely to print at 1.3% of the GDP, according to a report by Bank of America Securities (BofA).
Given the sharp increase in global commodity prices, particularly oil, concerns about current account deficit (CAD) and its serviceability have resurfaced, the report said.
“But, we see FY22 CAD at 1.3% of GDP or $40 billion, up from a 0.9% surplus in FY21, but still well-contained under the threshold of 2.5% of GDP,” BofA said on Tuesday.