Japanese brokerage Nomura on Friday said the country is likely to post first quarterly current account surplus in nine years in the June quarter at $4 billion (nearly Rs 26,611 crore) or 0.8% of the gross domestic product (GDP).
"We believe this swing in the current account balance will be driven by a sharp narrowing of the merchandise trade deficit," it said in a note.
It added that despite weak global demand which has resulted in subdued non-oil exports, services exports and remittances, imports have contracted sharply.
The imports are lower on weak investment demand, lower oil prices and a sharp correction in gold imports which were 48% lower in the April-June period, it said.
The note said that imports are likely to remain subdued for the remainder of the year as all the indicators are pointing to further weakness in non-agriculture growth.
Current Account Deficit (CAD), or the difference between inflow and outflow of foreign exchange, came in at 1.1% of GDP in 2015-16, 1.3% in 2014-15, 1.7% in 2013-14 and a record high of 4.8% of GDP in 2012-13.
The highest ever CAD in FY13 was one of the biggest reasons which wrecked the rupee, following the taper tantrums and made the currency the worst performing one.
The current account gap had come in at a deficit of $0.3 billion (nearly Rs 1,995.83 crore) in the preceding quarter of January-March. The last time the country experienced a quarterly current account surplus was in January-March 2007, according to Nomura.
The brokerage, however, said it expects the full current account deficit (CAD) for 2016-17 to rise to 1.4%.
It said oil prices is the biggest factor to watch out and may hurt the number adversely as well.
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