India's current account deficit increased to USD23.0 billion in October-December, the biggest since October-December 2012, according to Reserve Bank of India (RBI) data released Thursday.

In the preceding quarter, the current account deficit was USD9.9 billion, compared to USD2.2 billion a year ago. The current account deficit in the third quarter of 2021-22 (Oct-Dec) was 2.7 percent of GDP, up from 0.3 percent the previous quarter. The merchandise trade deficit increased to USD60.4 billion in October-December from USD34.6 billion the previous year.

With a dependence on energy imports of more than 80%, the rise in crude oil and commodities prices as a result of Russia's invasion of Ukraine is likely to worsen India's trade deficit even more. "Given the Russia-Ukraine war, the major macro variable set to deteriorate is the current account deficit, which we now project to exceed USD100 billion in FY22-23," Barclays stated in a research released today. Brent crude futures for immediate delivery hit a 14-year high of USD139 per barrel in March and are now hanging around USD100 per barrel.

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