CAD likely to be 2.5-2.7 % this fiscal: Ahluwalia
CAD is a difference between outflow and inflow of foreign exchange. It was at USD 88.2 billion or 4.8 percent of GDP in the last fiscal. The Finance Ministry expects it to be at USD 56 billion or less this financial year. Last year 2012-13 it was 4.8 percent.
November 27, 2013 / 21:53 IST
Planning Commission Deputy Chairman Montek Singh Ahluwalia today said the current account deficit may remain between 2.5 percent and 2.7 percent of the GDP this fiscal.
He also indicated that the current position of the rupee is competitive against world currencies. "It is my view that it (GDP) would be significantly below 3 percent... That time, the finance ministry said that it is going to be much better and I think he used the number like 3.7 percent."But the good news is it is going to be below 3 percent...significantly below 3 percent. If I have to give a number, (I will put) somewhere between 2.5 percent and 2.7 percent," Ahluwalia told reporters on the sidelines of an event at Indian School of Business (ISB).Also read: Rupee to stabilise, emerging markets cheap: Credit SuisseCAD is a difference between outflow and inflow of foreign exchange. It was at USD 88.2 billion or 4.8 percent of GDP in the last fiscal. The Finance Ministry expects it to be at USD 56 billion or less this financial year. Last year 2012-13 it was 4.8 percent.On rupee's depreciation against global currencies, he said the present position of rupee is not bad for the country when compared with the situation a few months ago. "I don't regard the present position of the rupee as bad for the Indian economy. Exports are doing well. At the earlier exchange rate that prevailed, we had become uncompetitive. At the present whatever 62-63, we are really quite competitive," he explained.Rupee plunged to a new record low of nearly 68.85 against the dollar in August and is currently hovering between 62 and and 63.On the projected target of 8 percent GDP growth in the 12th Plan, he said it is achievable once the country overcomes the short term short-term problems. "I think India can sustain is around 8 percent growth.The fundamentals as far as we are concerned are strong... that we can easily sustain an investment rate of something like 36-37 percent, with a 2.5 percent of CAD, the domestic savings required will be 34.5 percent. These are not difficult targets for us to achieve," he added.
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