For the first time in several years, net foreign direct investment inflows into the country were projected to be larger than portfolio capital inflows.
The net FDI for 2006-07 would be around $9 billion, up from $4.7 billion last year, the Prime Minister's Economic Advisory Council said in its update on the country's balance of payments outlook for this fiscal.
"This comprises in-bound FDI of around $12 billion and out-bound FDI of $3 billion. The portfolio capital inflow is likely to be $7 billion this fiscal," the council said in its report released here today.
The current account deficit was likely to be 1.5 per cent of the GDP for the year and $22.6 billion would be added to the country's forex reserves in 2006-07, up from $15.1 billion last year, the report said.
The council has estimated the current account deficit for the full year at $13.4 billion, which is 1.5 per cent of the projected GDP of $900 billion for 2006-07. The figure stood at $6.5 billion for the first half of the current fiscal.
"Of the forex accretion, $8.6 billion has already been absorbed in the April-September period. It is estimated that another $6-7 billion must have come during October-December, leaving a likely amount to be absorbed in Q4
of this fiscal. The monetary policy has to take this into account," the report said.ock" id="div_arti_inline_advt">
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