Global investment bank Goldman Sachs has lowered its forecast for India’s current account deficit (CAD) to 1.3% of GDP, citing stronger external sector fundamentals and a more favorable trade outlook. The revision reflects expectations of resilient services exports, steady remittance inflows, and a moderation in import growth, which are helping to narrow the country’s external financing gap.
The updated projection signals growing confidence in India’s balance of payments position despite ongoing global economic uncertainties. Lower energy prices and improving export performance have contributed to easing pressure on the current account, while robust domestic demand continues to support economic growth.
Analysts at Goldman Sachs noted that India’s external vulnerability remains limited, supported by healthy foreign exchange reserves and diversified export earnings. The improved CAD outlook is expected to strengthen investor sentiment and provide additional stability to the rupee.
The revision comes as policymakers closely monitor global trade developments and commodity price movements, both of which remain key determinants of India’s external sector performance. A narrower current account deficit could also enhance the country’s macroeconomic resilience and create greater room for sustained growth in the coming quarters.