India's Current Account Deficit Seen At 2 Per Cent Of GDP In FY14: Crisil
BANGALORE: India's current account deficit is likely to narrow to a 6-year low of 2 per cent of its gross domestic product (GDP) this fiscal year (FY14), but may expand to 2.7 per cent in FY15 as imports pick up, rating agency Crisil said.
"We expect CAD to print 2 per cent of GDP in 2013-14, the lowest since 2007-08... however, it will rise to 2.7 per cent of GDP in 2014-15," Crisil's research wing said in a report.
The current account deficit, which had touched an all-time high of 4.8 per cent in FY13 - leading to a massive depreciation in the rupee - will improve to the 2 per cent level this fiscal year on a heavy contraction in imports, it said.
In Q3, the deficit - which indicates imports of goods, services and transfer are higher than their exports - came down sharply to an 8-year low of 0.9 per cent of GDP from a high of 6.5 per cent a year ago, primarily driven by a massive drop in bullion imports.
During the first three quarters of FY14, the current account deficit print stood at 2.3 per cent of GDP.
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