India’s current account deficit is projected to widen to about $37 billion in 2026 as stronger domestic demand pulls in higher imports, according to a forecast from Goldman Sachs.
The investment bank attributed the expected widening to improving consumption, which is set to draw in more non-oil, non-gold imports. A pickup in domestic demand typically lifts purchases of goods from abroad, increasing the trade gap.
Even as imports rise, services exports are expected to remain strong, providing a partial offset. India’s services sector, spanning software and business services, has been a steady source of foreign exchange earnings that helps cushion the external balance.
The current account deficit measures the gap between a country’s payments to and receipts from the rest of the world on trade and income. A moderate deficit is often viewed as consistent with an economy in an investment and consumption upswing, provided it remains financed by stable capital flows.
The projection forms part of Goldman Sachs’ broader outlook for the Indian economy, which anticipates solid growth supported by domestic activity and improved trade policy clarity. Policymakers monitor the external balance for signs of financing pressure.
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Sources:
https://www.goldmansachs.com/insights/articles/the-outlook-for-indias-economy-in-2026-amid-new-us-tradedeal