India's current account deficit is expected to show some improvement in the January-March period at 4-4.5 per cent of GDP, but is likely to worsen again in the current quarter due to sluggish exports, high gold demand and seasonal rise in imports, Nomura has said.
After hitting a record high of 6.7 per cent of GDP in Q4 2012, in the first quarter of this year CAD is likely to narrow to 4-4.5 per cent of the GDP, owing to some improvement in trade deficit, the Japanese firm said in a research note.
CAD represents the difference between inflows and outflows of foreign currency.
It is likely to worsen in the April-June quarter as the country's trade deficit has worsened again to $ 17.8 billion in April and Nomura said it expects CAD to deteriorate further to $ 20.8 billion in May.