Macroeconomic Forecast India

India's domestic demand will fuel stronger import growth over the next two years, while we believe that export growth will be more muted over the time period amid a slowdown in the US, Eurozone and China. As such, we are forecasting India's current account deficit as a percentage of GDP to widen to 3.8% and 4.4% of GDP for FY2010/2011 (April-March) and FY2011/2012, respectively. Beyond the next two years, we expect the current account deficit to average around 4.0% of GDP over the coming decade.

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