India’s current account deficit expected to rise to 1.7% of GDP in FY26

India’s current account deficit (CAD) is expected to rise to 1.7 per cent of GDP in the current financial year FY26, higher than the bank’s earlier projection of 1.2 per cent, according to a report by Union Bank of India.

- AGENCIES

The rise is mainly attributed to persistent global trade tariff pressures that continue to keep the trade deficit elevated despite weak demand and lower commodity prices.

It stated, “We expect a rise in current account deficit to 1.7 per cent of GDP in FY26, as global trade tariff pressures continue to keep trade deficit elevated”.

A current account deficit (CAD) occurs when a country’s total value of imports of goods, services, and capital is greater than the total value of its exports and other income. It indicates that more money is flowing out of the country than is flowing in.