CAD

India's current account deficit narrowed sharply in Q2FY26 on lower trade gaps and strong remittances. But a spike in gold imports in October could push the Q3 deficit above 2.5 per cent of GDP

The spectre of higher tariffs imposed by the US means export prospects, including for India, will be subdued in 2025

The CAD in the December quarter of 2024-25 has moderated from $16.7 billion (1.8 per cent of GDP) in the preceding quarter of the fiscal year

The current account deficit (CAD) for the September quarter is set to widen to 1.6 per cent -- the most in the last seven quarters -- a report said on Thursday. In absolute terms the July-September CAD will be USD 15 billion, or 1.6 per cent, as against USD 9.8 billion, or 1.1 per cent, in the June quarter, India Ratings and Research said in the report. The CAD in the second quarter will be the highest since Q3 FY23, where the crucial gap representing the country's external position was USD 16.8 billion, or 2 per cent of the GDP. The domestic rating agency said merchandise exports shrank 3.9 per cent during the period while goods exports were down to a 12-quarter low of USD 103 billion. Goods exports declined after three quarters due to subdued demand from major exporting partners such as China, Singapore, Bangladesh, and Australia, it said. The CAD is moderate to about 1.3 per cent of the GDP in December quarter, Paras Jasrai, its economist and senior analyst, said.

Aditi Nayar, chief economist at ICRA, said, "While the CAD expectedly widened in Q1FY25, it undershot our forecast primarily due to secondary income."

India's current account deficit declined to USD 10.5 billion or 1.2 per cent of the GDP in October-December quarter from USD 11.4 billion in the previous three months and USD 16.8 billion a year back, the Reserve Bank of India (RBI) said on Tuesday. Net FDI inflow at USD 8.5 billion during April-December 2023 was lower than USD 21.6 billion during April-December 2022, it said. Also, accretion of foreign exchange reserves (on a BoP basis) was at USD 6.0 billion in October-December (third quarter of current financial year that ends on March 31) compared to an accretion of USD 11.1 billion a year ago. The merchandise trade deficit at USD 71.6 billion was marginally higher than USD 71.3 billion during the third quarter of 2022-23. Services exports grew by 5.2 per cent on a year-on-year basis on the back of rising exports of software, business and travel services. Net services receipts increased both sequentially and from a year ago that helped cushion the current account deficit. In t

Stating that the country's external balances are stronger than expected on the back of strong inflows, a Wall Street brokerage on Tuesday projected a much lower current account deficit which is likely to print at 1 per cent for this fiscal, leaving the balance of payment surplus at USD 39 billion. Goldman Sachs in a report said the country's external balances remain favourable with a combination of low CAD, strong capital flows, adequate forex reserves and low external debt. Combined with this, expectations for a weaker dollar due to the likely five US Fed rate cuts this year suggest a "goldilocks" environment for the country's external balances. Accordingly, the Wall Street major has revised upwards its current account deficit (CAD) forecast to 1 per cent of GDP for FY24 from 1.3 per cent earlier, and 1.3 per cent for FY25 from 1.9 per cent earlier, citing a downward revision to their oil price forecast to USD81/barrel in 2024 from above USD90 earlier; and services exports continui

India had seen an improvement in its current account balance in the March 2023 quarter

Net services receipts increased, both sequentially and on a year-on-year (YoY) basis, on the back of a rise in net earnings from computer services

Despite an improved external situation, Goldman expects rupee to underperform Asian peers

The rupee closed FY23 at 82.18 to a dollar, against 75.79 a year ago

Non-resident deposits recorded net inflows of $2.6 billion in the third quarter of the current fiscal as compared to net inflows of $1.3 billion in the year-ago period

CAD may be better than expected in FY23, but India won't be completely out of the woods next year, says official

In the September quarter, CAD touched a nine-year high at 4.4 per cent from 2.2 per cent in the June quarter as the negative net exports shot up to $50.3 billion from $36.3 billion

This could be owing to cheaper crude oil, resilient net services exports and buoyant inward remittances

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Net exports of services rose 35% to $34.5 billion in the second quarter of the current fiscal

Renewed overseas flows to provide support

Balance of Payments position sees depletion of $30.4 billion, says central bank

Indian currency underperforms EM peers; analysts cite shrinking forward premia, widening CAD