The Economic Survey 2021-22 has projected India’s GDP to grow in real terms by 8.0 to 8.5 per cent in 2022-23 based on the assumption that oil prices would be in the range of $70-$75 per barrel, among other things.
India’s current account deficit, the difference between imports and exports of goods and services, for the second quarter ended September 2021 (Q2FY22) was at $9.6 billion, accounting for 1.3 per cent of GDP. According to ICRA, the current account deficit is expected to be in excess of $25 billion in Q3 FY22, rivalling the size of the full-year CAD in FY20. For the year as a whole (FY22), the CAD is likely to be at $40-45 billion, or around 1.4 per cent of GDP.
“Crude in the $100-110 band for a couple of weeks would hitless. But if it persists at that range for a longer time it's a worry. Crude remaining in that price range for a long time would impact the current account deficit, inflation, and fiscal deficit. Current account deficit will have an impact on currency and inflation on infrastructure,” according to Devendra Pant, chief economist, India Ratings & Research.