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Global economic outlook appears to be "most favourable" since the 2008 financial meltdown and is likely to improve further on the back of plummeting crude oil prices coupled with sharp recovery in the US economy, says the Economic Survey 2014-15.
"Outlook for the external sector is perhaps the most favourable since the 2008 global financial crisis and especially compared to 2012-13, when elevated oil and gold imports fuelled a surge in the current account deficit," said the survey tabled in Parliament.
"The global economic environment appears poised for a change for the better with recent sharp fall in the international prices of crude petroleum which is expected to boost global aggregate demand, and the sharp recovery in the US economy in the face of gradual withdrawal from monetary accommodation," it added.
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Besides, the survey said that while India's trade and current account deficits are on even keel, the copious financial inflows in excess of financing requirement have helped shore up its foreign exchange reserves, which stood at $328.7 billion at end-January.
These have helped allay the vulnerability concerns that led to severe stress last year.
"These concerns, however, remain a potent downside risk, should the global environment deteriorate for some reason," the survey said.
India is the second largest foreign exchange reserve holder after Brazil among the major economies with current account deficit.
After the global crisis of 2008, the global economy came under a cloud of uncertainty and prolonged weakness in euro area particularly since 2011.