World Economy

India CAD May Widen

India CAD  May WidenIndia CAD  May Widen

India’s current account deficit is likely to widen in the June quarter to 1.8-2.0% of GDP, while for the current financial year, it is likely to remain under control, PTI quoted DBS Bank report as saying. According to the global financial services major, though the widening of CAD is likely to raise concerns “briefly” over wider trade imbalances, the full-year CAD is likely to remain within control. “India’s current account deficit is likely to widen anew in the June 2015 quarter, but will not emerge as a flash-point for the full-year FY15/16 (April 2015 to March 2016),” DBS said in a research note. As per official figures, the CAD, which is the difference between the inflow and outflow of foreign exchange shrank to 1.3% of GDP ($27.5 billion) in 2014-15 from 1.7% ($32.4 billion) in 2013-14. The Reserve Bank of India and the government have been maintaining that the CAD level is comfortable.