India’s current account deficit (CAD) for the July-September quarter (Q2) rose to USD 10.1 billion from USD 7.8 billion in Q1 and USD 5.2 billion in Q2FY14. According to data released by RBI, CAD rose sharply on account of deceleration in export growth and an increase in imports.
India’s current account deficit (CAD) for the July-September quarter (Q2) rose marginally to USD 10.1 billion (2.1 percent of GDP) from USD 7.8 billion (1.7 percent of GDP) in Q1 and USD 5.2 billion (1.2 percent of GDP) in Q2 of 2013-14. According to data released by RBI, CAD rose sharply on account of higher trade deficit contributed by both a deceleration in export growth and an increase in gold imports.
While export growth slid to 4.9 percent in Q2 of 2014-15 from 11.9 percent YoY, imports increased by 8.1 percent in Q2 of 2014-15 as against a decline of 4.8 percent in Q2 YoY, largely due to a sharp rise in gold imports. Trade deficit in Q2 now stands at USD 38.56 billion versus USD 34.6 billion in the preceding quarter.
Although, net services receipts improved by 3.4 percent in Q2 as telecom, computer and IT services showed improvement from their level a year ago, net outflow on account of primary income (profit, dividend and interest) amounting to USD 6.9 billion in Q2 was higher than Q2FY14 (USD 6.3 billion) as well as the preceding quarter (USD 6.7 billion).