India’s macro risks have receded in recent weeks and concerns about the fiscal deficit target being breached may be misplaced, the Finance Ministry asserted on Thursday, while conceding that the current account deficit could, however, deteriorate this year primarily due to rising trade deficits, especially if global food and energy prices don’t cool off.
Identifying elevated inflation and a widening trade deficit as ‘twin challenges’ for the economy, the Ministry, however, emphasised that economic activity in the country remained resilient almost five months into the Russian-Ukraine conflict.
