Re: Reply to Dr. Roy - Bank of America Report

["Raju Agarwal" <krantikari@hotmail.com>]

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Dr. Roy, will you dismiss this report by Bank of America as "industry hype" 
as well?


India's 2000-01 current account seen in surplus


MUMBAI
THE BANK of America said in a report on Tuesday it expects India to post a 
current account surplus in 2000-01 (April-March) helped by booming software 
exports, lower global oil prices and declining non-oil imports.

"We expect the current account to post a large surplus in the second half of 
the current fiscal, and cannot rule out the possiblity of the first half 
current account deficit of $4 billion being wiped out in the second half," 
the bank said.

India's balance of payments showed a deficit of $413 million for the 
July-September quarter, compared with a deficit of $1.021 billion in the 
preceding three months, according to central bank data.

The current account deficit for July-September was pegged at $1.6 billion 
compared to $2.3 billion in the preceding quarter.

BoA's views are in sharp contrast to earlier expectations by some Indian 
monetary authorities who last year said the country is likely to post a 
current account deficit for 2000-01 (April-March) after four years of 
surplus because of high global oil prices and slowing foreign capital flows.

The report said declining trade deficit and growth in invisible receipts, 
especially software, were expected to continue for the next few months 
despite a slowdown in the US economy.

"Invisibles are expected to grow at least $1.5 billion this year on the back 
of 50 percent growth in software exports and the current account deficit 
should be wiped out," the report said.

For April-December, exports grew 20 percent year-on-year to $32.27 billion 
from $26.79 billion, while imports rose just 8.95 percent to $38.15 billion 
from $35.01 billion.

As a result, April-December trade deficit fell to $5.88 billion from $8.22 
billion.

Capital flows have surged in the past month due to strong foreign investment 
inflows and inflows towards earthquake relief, the report said, adding that 
it expecte capital flows during the financial year to cross $5 billion.

Net foreign portfolio inflows totalled $908.8 million in January -- nearly 
two-thirds of the $1.56 billion that came in the whole of 2000. - Reuters

© The Economic Times Online. All rights reserved.
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