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The Current Account Deficit (CAD) is expected to fall below 1% in the next fiscal on the back of easing of global commodity prices including petroleum products, the Economic Survey 2014-15 said today.
"Assuming a further moderation in average annual price of crude petroleum and other products, the current account deficit is estimated at about 1.3% of GDP for 2014-15 and less than 1.0% of GDP in 2015-16," the Survey tabled by Finance Minister Arun Jaitley said.
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The CAD is the net difference between outflows and inflows of foreign currencies.
Global crude petroleum prices averaged about USD 47/ bbl in January 2015 and about USD 90/bbl for the year as a whole (April 2014-January 2015).
Reduction in CAD to about 1% in the coming fiscal year has made India an attractive investment destination well above most other countries, the survey said.
The outlook for the external sector is perhaps the most favourable since the 2008 global financial crisis, and especially compared to 2012-13, when elevated oil and gold imports fuelled a surge in the CAD.
CAD had peaked to 6.7% of GDP in the third quarter of 2012-13.