Q2 current account deficit widens to $8.2bn; 1.6% of GDP

Moneycontrol BureauThe country's current account deficit (CAD), or the difference in the value of goods and services exported and imported, widened from USD 6.2 billion in the first quarter (1.2 percent of gross domestic product) of the fiscal year to USD 8.2 billion (1.6 percent of GDP) in the second.The CAD is lower when compared year-on-year: in the second quarter last year, it stood at USD 10.9 billion (2.2 percent of GDP).The second quarter trade deficit stood at USD 37.4 billion, compared to USD 34.2 billion QoQ and USD 39.7 billion YoY.In the first half, CAD stood at 1.4 percent of GDP versus 1.8 percent in the first half last year.For the first half, trade deficit stood at USD 71.6 billion versus USD 74.7 billion YoY.Overall, the H1 balance of payments stood at USD 10.6 billion versus USD 18.1 billion."The export contraction was more severe in the second quarter than in the first," Rupa Rege-Nitsure, Chief Economist at L&T Finance Holdings, told CNBC-TV18. "That explains the widening."ICRA Economist Aditi Nayar added that gold imports too were higher YoY, which added to the import bill. "But the overall number is in line with our expectations," she said.For the full year, Nayar said she expects CAD to come in at 0.8 percent of GDP. "Overall, very much in control. Sluggish exports will be offset by fall in imports," she said.