Chennai, May 17 (IANS): Credit rating agency Acuite Ratings & Research said it expects India's current account deficit to narrow to $53 billion in FY24.

In a report, Acuite Ratings said India's current account deficit for FY24 is expected to narrow to $53 billion in FY24 bn (1.4 per cent of gross domestic product-GDP) -- compared to a level of about 2 per cent of GDP in FY23.

India's merchandise trade balance started FY24 on a comforting note, with the deficit narrowing to a 20-month low of $15.2 billion in April 2023 from $18.6 billion in March 2023.

While both exports and imports contracted sequentially in line with seasonality typically seen at the start of the fiscal year, a sharper sequential correction in imports vis-A-vis exports drove the improvement in the trade deficit print, Acuite Ratings said.

According to the credit rating agency, the core trade deficit (the headline excluding petroleum and gems & jewellery items) however, widened to $5.7 bn in Apr-23 from $4.3 bn in Mar-23, led by machinery items, textiles and chemicals.

Services trade surplus is estimated to have eased marginally in April'23, to $13.9 billion from $14.2 billion in March'23. Both exports and imports were little changed on a sequential basis in the month.