BoP: Current Account Deficit reaches 5.4% of GDP in Q2FY13

CRISIL Research has come out with its report on BoP data of Q2FY13. The research firm expects some recovery in export growth due to improvement in global conditions, India’s current account is likely to remain under pressure.
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Jan 02, 2013, 06.06 PM | Source: Moneycontrol.com

BoP: Current Account Deficit reaches 5.4% of GDP in Q2FY13

CRISIL Research has come out with its report on BoP data of Q2FY13. The research firm expects some recovery in export growth due to improvement in global conditions, India’s current account is likely to remain under pressure.

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BoP: Current Account Deficit reaches 5.4% of GDP in Q2FY13

CRISIL Research has come out with its report on BoP data of Q2FY13. The research firm expects some recovery in export growth due to improvement in global conditions, India’s current account is likely to remain under pressure.

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, CRISIL Research |

CRISIL Research has come out with its report on BoP data of Q2FY13. The research firm expects some recovery in export growth due to improvement in global conditions, India’s current account is likely to remain under pressure due to the composition of its import basket which is largely dictated by its energy needs as well as a whole range of capital goods and manufactured intermediates/components.

India’s current account deficit (CAD) swelled to US$22.4 billion (5.4 per cent of GDP) in Q2FY13 from US$16.6 billion (3.9 per cent of GDP) in Q1FY13 as merchandise exports growth fell more sharply than imports in Q2FY13. A high import bill on account of gold and oil import and falling exports due to global slowdown has lately kept India’s CAD at consistently high levels. Within invisibles, however, all major services posted a y-o-y increase in Q2FY13. Despite a surge in the foreign direct investment (FDI) and portfolio investment under the financial account, the foreign exchange reserves (excluding the valuation effect) declined by US$ 0.2 billion in Q2FY13 due to the high CAD.

Going forward, CRISIL Research although expects some recovery in export growth due to improvement in global conditions, India’s current account is likely to remain under pressure due to the composition of its import basket which is largely dictated by its energy needs as well as a whole range of capital goods and manufactured intermediates/components.

Disclaimer: CRISIL Limited has taken due care and caution in preparing this Report. Information has been obtained by CRISIL from sources, which it considers reliable. However, CRISIL does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. CRISIL Limited has no financial liability whatsoever to the subscribers / users / transmitters / distributors of this Report. The Centre for Economic Research, CRISIL (CCER) operates independently of and does not have access to information obtained by CRISIL's Ratings Division, which may in its regular operations obtain information of a confidential nature that is not available to C-CER. No part of this Report may be published / reproduced in any form without CRISIL's prior written approval.

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