CAD likely to narrow to 1.1-1.2% of GDP in Q3: Rating agencies

Tags: CAD, News
The country's current account deficit is likely to decline to 1.1-1.2 per cent of the gross domestic product in the third quarter, say rating agencies.

"We expect the current account deficit (CAD) to decline to 1.1 per cent of GDP in 3Q FY14 based on the trade deficit of $ 10.1 billion in December 2013," India Ratings and Research (Ind-Ra) said in a report today.

CAD is the excess of forex outflows over inflows.

India's exports grew 3.49 per cent in December to $ 26.3 billion, while imports dipped 15.25 per cent which helped narrow the trade deficit to $ 10.1 billion compared with $ 17.5 billion in the same period of 2012.

Overall, trade deficit for Q3 FY14 (October to December 2013) stood at $ 29.9 billion which was at the same level as in Q2 FY14.

"Given this, and with service export growth in Q3 expected to be at least similar to that in the second quarter, the current account deficit is likely to remain close to the level seen in Q2 FY14 which was 1.2 per cent of GDP," rating agency Crisil said.

For the April-December period, exports aggregated $ 230.3 billion and imports $ 340.3 billion while the trade deficit stood at $ 110 billion.

India Rating, however, said it is likely to revise its exports, imports and CAD numbers for FY14, given the 5.9 per cent growth in exports and 6.5 per cent contraction in imports during the first three quarters of FY14.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

EDITORIAL OF THE DAY

  • Lawmakers must not dilute penalties for insurers on mis-selling

    The much delayed insurance laws (amendment) bill is back in the news and the positive statements of finance minister Arun Jaitley suggest that the gov

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

Chander Mohan Sethi

CMD, Reckitt Benckiser India

COLUMNIST

Arun Nigavekar

New model for effective education

After interacting with students and teaching community on a ...

Zehra Naqvi

Being unrealistic can be good for you

Depression is a term that most people use very casually ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture