CAD to remain at 2% of GDP, says Rangarajan

Tags: News
The current account deficit, an indicator of the country’s overgrowing imports when compared with the exports, is likely to remain at two per cent of the dross domestic product, according to C Rangarajan, chairman of the prime minister’s economic advisory council.

“Two per cent of the GDP is the likely level at which the CAD will settle down. The short rise in CAD was mainly because of the extraordinarily large gold import and the gold prices were not rising too. But now, the attraction of gold as an asset is coming down and there fore as we go ahead the demand for gold will come down, along with other contributing factors,” he said.

The CAD in 2012 -13 stood at $ 88 billion, at 4.7 per cent of GDP. Where as, it had come down to $32 billion in 2013-14 at 1.7 per cent of the GDP. In the interim budget, the government had projected it to be at $35 billion toward March end.

“The restrictions that have been imposed by the administration will not remain. As it is, the duty on gold is not as high as the duty on other luxury products. The inflation is coming down, and gold prices going up among other factors will bring down the gold imports,” he said.

On the other hand, talking about the El- Nino effect, Rangarajan said, “We do not know what the ultimate impact will be. Sometimes these forecasts also will go wrong. So we will have to wait and see.” El Nino is the warming of oceans at the Pacific equator, which is likely to affect by either flood or droughts, bringing in disturbances in global food supply.

trushnaudgirkar

@mydigitalfc.com

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E-mail ID will not be published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

  • Merger of FMC with Sebi could be precursor to a super markets regulator

    Finance minister Arun Jaitley’s decision to merge commodity market regulator FMC with market watchdog Sebi is a welcome step.

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

Simon J Evenett

What to expect from WTO this year

Following world trade talks isn’t for the faint hearted. After ...

Kuruvilla Pandikattu SJ

The five deaths that we suffer

In the sixteenth century, French philosopher Michel de Montaigne, in ...

Shona Adhikari

Art world celebrates two ‘new’ Cezannes

The focus moves once more to post-impressionist Paul Cezanne, who ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture