BENGALURU, Sept 1 Reuters India39;s current account deficit deteriorated sharply in the last quarter and is expected to end the fiscal year at its widest in a decade as ballooning trade imbalances coincide with a decline in foreign investment, a Reuters poll found.

A revival in domestic demand in Asia39;s thirdlargest economy and a surge in global commodity prices combined with a battered currency and gaping trade deficit has widened the current account shortfall.

That gap is expected to average 3.1 of gross domestic product this fiscal year, according to an Aug. 2226 Reuters poll of 26 economists.

That would be the widest since hitting almost 5 during the taper tantrum crisis nearly a decade ago when the U.S. Federal Reserve cut its government bond purchases. About a decade later, India finds itself in a similar situation.

Since the beginning of the year, the U.S. Federal Reserve has embarked on its most aggressive tightening cycle in decades, tapering more than 8 trillion of Treasury securities and triggering outflows from emerging markets, including India.

The Reuters poll predicted the current account gap at a decadehigh of 3.9 last quarter, before narrowing to 3.6, 3.0 and 2.5, in Q2, Q3 and Q4 of this fiscal year, respectively.

On the one hand, there is a stagnation of exports that we are seeing, which over the past six to seven months is stagnating around 3536 billion. Whereas if you look at imports, that has been continuing to increase, said Suvodeep…