CAD to widen to 2.2% of GDP in FY15: CRISIL

India Infoline News Service | Mumbai |

The impact of a partial removal of gold import restrictions is visible in June data as gold imports doubled to $3.2 billion from $1.7 billion in April 2014.

Merchandise trade deficit for April-June 2014 (Q1 fiscal 2015) stood at $33.1 billion – a reduction of 31% compared to Q1 of last fiscal. The reduction was driven by 9.3% growth in exports and a sharp fall in gold imports compared to the same period a year ago. In comparison with the last quarter however, merchandise trade deficit was higher by $4.5 billion, suggesting potential widening of the current account deficit (CAD) in Q1 fiscal 2015.
For fiscal 2015, we expect CAD to widen to 2.2% of GDP, CRISIL said in its report.
Export growth is likely to gain momentum with global recovery, imports too will rise as some of the restrictions on gold imports have been lifted and imports of oil, consumption and investment goods pick-up with recovery in GDP growth, the report added.
The impact of a partial removal of gold import restrictions is visible in June data as gold imports doubled to $3.2 billion from $1.7 billion in April 2014.
 

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