India’s current account deficit is “mainly manageable” and within the parameters of viability, India’s central bank governor Shaktikanta Das said at an event on Friday.
India’s average current account deficit for the first six months of 2022-23 stood at 3.3% of GDP.
The net balance under services and remittances remains in a large surplus, which partly offset the trade deficit, Mr Das told a conference in Dubai, according to a copy of the speech released by the central bank.
He said slowing global demand is weighing on merchandise exports, although the country’s exports of services and remittances remain strong.
While the global environment has turned hostile and uncertain, the Indian economy remains resilient, Mr Das said, pointing to a strong financial system in the country and a reduction in corporate balance sheets.
Headline retail inflation in the country has cooled over the past few months but has remained broadly high, hovering at the upper end of the central bank’s tolerance band of 2%-6% for the better part of the year.
“Core inflation, however, remains stable and high,” he said.