Q2 CAD widens at 0.6 per cent of GDP
DSIJ Intelligence / 14 Dec 2016
The data of current account deficit for the July-September quarter is out. In Q2FY17 current account deficit (CAD) has risen to USD 3.4 billion (0.6 per cent GDP) from USD 0.3 billion (0.1 per cent GDP) in the previous quarter. On a YoY basis, there was a rise in the current account deficit from USD 8.6 billion (1.7 per cent GDP) in Q2FY16.
The data of current account deficit for the July-September quarter is out. In Q2FY17 current account deficit (CAD) has risen to USD 3.4 billion (0.6 per cent GDP) from USD 0.3 billion (0.1 per cent GDP) in the previous quarter. On a YoY basis, there was a rise in the current account deficit from USD 8.6 billion (1.7 per cent GDP) in Q2FY16.
According to RBI's press release, the contraction in the CAD on year-on-year basis was primarily on account of lower trade deficit (USD 25.6 billion) brought about by a larger decline in merchandise imports relative to exports.
The rise in imports led by greater non-oil non-gold imports (incl. defence) led to a higher trade deficit. Going ahead, some measure of comfort would be provided by marginally better exports and downside pressure on non-oil non-gold imports as demonetisation disrupts short-run GDP growth.
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