Current account deficit at record 5.4% of GDP in Q2

A A

fe Bureau: New Delhi, Jan 01 2013, 01:55 IST

India's’S current account deficit (CAD) worsened in July-September to hit a record of $22.3 billion primarily on account of a sharp fall in merchandise exports —exports fell $7 billion quarter-on-quarter (q-o-q) — and lower services exports. While FII and FDI flows both rose sharply — by $5 billion and $9.5 billion respectively on a q-o-q basis — the impact of this was lowered somewhat by a $4-billion contraction in NRI deposits between the June and September quarters. Shubhada Rao, chief economist Yes Bank said the CAD stress was “likely to persist” as exports continue to fall in October and November and services exports flatten.

At this level, the CAD is a record 5.4% of gross domestic product, worse than 4.2% in the same period the previous year. For the nine-month period of April-September, the CAD stood at $38.7 billion or 4.6% of GDP, balance of payments data released by the Reserve Bank of India on Monday showed.

RBI governor D Subbarao had said that a CAD of around 2.5-3.0% is sustainable for the Indian economy. Anything above that has implications for the stability of the external sector.

Exports fell by 12.2% in July-September as compared with a 45.3% growth in the same period the previous year while imports fell marginally by 4.8% compared with a rise of 38.1% in the previous year. The government’s decision to hike import duty on gold in June seemed to have not had a big impact as gold imports stood at $10.46 billion, a fall of just

... contd.

Ads by Google

Single Page Format

1 | 2 | 3 | Next

Desperate to axe India's gold habit, govt mulls yellow metal-linked schemes to curb import More steps needed to control gold import: FMGlobal slowdown may dampen export growth prospects in 2013 Current account deficit at record 5.4% of GDP in Q2

Previous Story Sebi chief Sinha wants discipline in IPO pricing Next Story Sebi chief Sinha wants discipline in IPO pricing

Reader's Comments| Post a Comment

Be the first to comment.