India may see current account surplus after 7 yrs: Nomura

Thanks to a steep fall in global crude oil prices, India may report its first current account surplus in over seven years at 1.5 percent of GDP in the ongoing quarter, leading brokerage Nomura said today.

"After recording a current account deficit every quarter for over seven years, we expect the current account balance to swing into a surplus of 1.5 percent of GDP in Q1 of 2015 compared with our current account deficit estimate of 1.6 percent of GDP for 2014 calendar year," Nomura India Chief Economist Sonal Varma said in a note.

Driven by a supply glut on the back of massive pumping out of shale gas by the US and supply increase by Iraq, Iran and also Russia, the oil prices have been falling drastically.

Since June, the prices of crude oil, of which India is a major importer, had fallen by close to 60 per cent and hit a six-year low of USD 47 to a barrel last week. Analysts at investment banks Goldman Sachs and Credit Suisse have pegged the bottom at about USD 37-39 a barrel. At the current price levels of about USD 50 a barrel, the average price of Indian basket of oil will be USD 49 a barrel in the March and June quarters, giving a cool 60 percent savings on its oil bill from the comparative quarters in 2014, according to analysts.