Rising Tide: India's Current Account Deficit Soars
India's Current Account Deficit (CAD) is projected to rise to 1.6% in the September quarter, marking the highest in seven quarters. Merchandise exports fell 3.9%, reaching a 12-quarter low. Major export partners like China and Australia show subdued demand. The CAD is expected to moderate to 1.3% by December.
- Country:
- India
India's Current Account Deficit (CAD) is on the rise, set to expand to 1.6% of GDP for the September quarter, marking the most significant gap in the past seven quarters, reported India Ratings and Research on Thursday.
In absolute terms, the CAD will amount to USD 15 billion in the July-September period, a jump from USD 9.8 billion, or 1.1% of GDP, in the previous June quarter. This will be the highest recorded since Q3 FY23, where it stood at USD 16.8 billion or 2% of GDP.
The domestic rating agency attributed the increase to a 3.9% decline in merchandise exports, which plummeted to a 12-quarter low of USD 103 billion. Contributing to this decline is the reduced demand from key trading partners, including China, Singapore, Bangladesh, and Australia. Economist Paras Jasrai expects a moderation to 1.3% in the December quarter.
(With inputs from agencies.)
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- Q3
- FY23
- India Ratings
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