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India's CAD Likely to Exceed 2% of GDP in Q3 FY25
The Business Guardian
|December 29, 2024
India's Current Account Deficit (CAD) is expected to rise above 2 per cent of GDP in the third quarter of FY25, driven by a surge in gold imports, according to a report by Bank of Baroda.
However, resilient services exports and remittance inflows are likely to cushion the overall impact, keeping the CAD for FY25 within a manageable range of 1.2 per cent-1.5 per cent of GDP.
India's CAD narrowed slightly to 1.2 per cent of GDP in Q2 FY25, compared to 1.3 per cent in the same period last year.
Higher CAD is also because of increased trade deficit; the merchandise trade deficit widened to USD 75.3 billion in Q2 FY25 from USD 64.5 billion in Q2 FY24. The increase was largely attributed to higher non-oil imports, with gold imports rising by USD 5 billion year-on-year.
This story is from the December 29, 2024 edition of The Business Guardian.
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