Mumbai: A report by Reuters claimed that the current account deficit (CAD) of India may jump to its highest in nearly a decade in the April-June quarter. As per the agency, the rising global commodity prices and the biggest capital outflows since the global financial crisis of 2008 are the main reason for this.
Current account deficit occurs when the value of goods and services imported and other payments exceeds the value of export of goods and services and other receipts by a country in a particular period.
The median forecast in a September 9-15 Reuters poll of 18 economists showed India’s current account deficit last quarter was $30.5 billion, or 3.6% of gross domestic product. This is the widest in nine years. For the Jan-March quarter, the deficit was at $13.4 billion, about 1.5% of GDP.
Earlier Standard Chartered raised its CAD forecast for the fiscal year ending March 2023 to 3.8% of India’s GDP from its earlier estimate of 3.0%. Bank of America Securities predicted that India’s current account deficit would likely reach 3% of GDP this fiscal year.
Meanwhile, the trade deficit in August widened to a high of USD 29.98 billion, up from $11.71 billion during the corresponding period of last year. India’s trade deficit widened to a record $30 billion in July. Trade deficit is the difference between imports and exports of the country.
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