India’s current account deficit is “eminently 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 stood at 3.3% of GDP for the first six months of 2022-23.
The net balance under services and remittances remains in a large surplus, partly offsetting the trade deficit, Mr. Das said at a conference in Dubai, according to a copy of the speech released by the central bank.
He added that slowing global demand was weighing on merchandise exports, though the country’s exports of services and remittances remained strong.
While the global environment has turned hostile and uncertain, the Indian economy remains resilient, said Mr. Das, pointing to a strong financial system in the country and deleveraged corporate balance sheets.
Headline retail inflation in the country has cooled in the past couple of months, but broadly remains high, having hovered 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 sticky and elevated,” he said.