Page 5 - Current Account Deficit

Current account deficit likely to be lower at 3% this fiscal: SBI report

State Bank of India has pencilled in lower current account deficit at 3 per cent for this fiscal as against the minimum consensus of 3.5 per cent, citing rising software exports, remittances and a likely USD 5-billion jump in forex reserves via swap deals. Every USD 10 increase in crude prices impacts the Current Account Deficit (CAD) to the tune of 40 basis points while the same on fuel inflation is 50 bps and also results in 23 bps decline in growth, according to Soumyakanti Ghosh, the chief economic advisor at SBI. CAD has a counter cyclical shock absorber, he said in a report on Thursday. Exchange rate is the major contributor to software exports growth and 40 per cent of its variation is explained by exchange rates. "If we translated these numbers in actual terms, every Re 1 fall against the dollar leads to an increase in software exports by USD 250 million". This, along with an expected USD 5 billion-forex reserve accrual by way of swap transactions and higher remittances, wi

A healthy debate: The case for and against interest rate hike

Having raised policy rates to about 6 per cent, does India's Monetary Policy Committee need to do more? And, if so, is more front-loading warranted?

Political currency or divine help?

Economic debates should be informed. Changing the currency notes or printing images of Lord Ganesh and Goddess Lakshmi on them will not help

Current account imbalance hits India harder than EM peers, shows data

India's current account deficit is projected at 3.5 per cent for 2022, says IMF World Economic Outlook report

Rupee fluctuations not a factor for MPC's consideration, says RBI

'Net LAF continues to be in surplus for the past two years, except for 2-3 days when because of SLF for the primary dealers it became deficit'

Inflation, external pressure priority over growth: Finance ministry

The MPC also cut its FY23 GDP growth forecast to 7 per cent from 7.2 per cent, with Governor Shaktikanta Das acknowledging that there were downside risks to economic growth

RBI expects current account deficit to come under 3% of GDP in FY23

The Reserve Bank expects the current account deficit to be under 3 per cent of GDP in FY23, Deputy Governor Michael Patra said on Friday. The CAD will "modestly widen" in the first half of the fiscal year and narrow in the second half, Patra told reporters in the customary post-policy press conference. "Overall, we expect the current account deficit to be under 3 per cent of GDP (in FY23)," Patra said. The comments come a day after official data released by the Reserve Bank of India (RBI) showed that the CAD widened in the first quarter of the fiscal to 2.8 per cent of GDP. In FY22, the CAD had stood at 1.2 per cent of the GDP. Patra said there are factors beyond the widening trade deficit as the exports are getting hit due to adverse economic developments in the advanced economies, and pointed out certain factors helping the CAD lately. He said the oil prices have moved south, which will lower the import bill, and there has been a 23 per cent growth in petroleum exports, courtes

Centre to put curbs on imports of some items to arrest rupee's fall: Report

The authorities have already started to track the imports of select products, including electronics. However, a final decision is still to be made

India's current account deficit widens in April-June quarter: RBI

In absolute terms, the current account deficit (CAD) stood at $23.90 billion in the first quarter of fiscal year 2022/23, its highest since the December quarter of 2012

Current account deficit widens to 2.8% of GDP in Q1; trade deficit jumps

Services exports, remittances show firm momentum in Q1

India's current account deficit widens to 2.8% of GDP in Q1FY23: RBI

India's current account deficit, a key indicator of the balance of payment position, widened to 2.8 per cent of GDP at USD 23.9 billion in the first quarter of the current financial year, mainly on account of a higher trade deficit. As per the data released by the Reserve Bank on India's Balance of Payments during the First Quarter (April-June) of 2022-23, the current account balance recorded a deficit of USD 23.9 billion (2.8 per cent of GDP) in the first quarter, up from USD 13.4 billion (1.5 per cent of GDP) in January-March period of the last fiscal. India's current account surplus stood at USD 6.6 billion, equivalent to 0.9 per cent of GDP in the first quarter (April-June) of 2021-22. "Underlying the current account deficit in Q1:2022-23 was the widening of the merchandise trade deficit to USD 68.6 billion from USD 54.5 billion in Q4:2021-22 and an increase in net outgo of investment income payments," the RBI said. It also said net services receipts increased, both sequentiall

India's CAD may have breached 3% of GDP in Q1 on surge in imports

Analysts peg full-year figure at $120 bn, but say it will be lower as proportion of GDP than FY13 levels

Even at $100 bn, FDI may not be sufficient to finance ballooning CAD

CAD is expected to hit a decadal high of 3.8% of GDP, or $130.5 bn; to make matters worse, FDI inflows expected are on gross basis and net inflows would be much lower than $100 bn

CAD may jump over 5% of GDP in Q2FY23, relief likely in the next fiscal

The current account deficit may have widened to 3.4% of the gross domestic product in the first quarter against a surplus of 0.9% a year ago

India, US 10-year yield spread at its lowest in 12 years, shows data

The current spread is nearly 142 bps lower than the 10-year average spread of 518 bps, and 66 bps lower than the 20-year average spread of 442.3 bps

Yield spread points to the muted market returns, says BNP Paribas

BNP Paribas said it has a cautious stance on the Indian markets amid lack of positive catalyst for further earnings upgrades amid slowing global demand, lofty valuations and a slowdown in retail flows

Current account deficit expected to reach 3.4% in Apr-June: India Ratings

India Ratings expects the current account deficit to hit a 36-quarter high of 3.4 per cent of GDP or USD 28.4 billion in the June quarter, against a 0.9 per cent surplus a year ago. In the March 2022 quarter, the deficit was a moderate 1.5 per cent or USD 13.4 billion, while in Q1FY22 the current account surplus was USD 6.6 billion or 0.9 per cent of GDP when the country was hit by the second wave of the pandemic, according to the agency. As a share of GDP, the current account deficit is expected to jump to a 36-quarter high after the 1QFY14 when it was 4.7 per cent. In absolute terms, it will be at a 38-quarter high after 3QFY13 when the deficit was USD 31.8 billion, India Ratings said in a note on Monday. Although merchandise exports touched a record high of USD 121.2 billion in Q1FY23, outward shipments are likely to slow down and come in at USD104.2 billion in Q2FY23, growing by a meagre 1.4 per cent in Q2 due to global headwinds. The International Monetary Fund in July slashed

CAD to come in at 9-year high in first quarter of FY23: Ind-Ra

Merchandise exports likely to slow down and come in at $104.2 bn in second quarter of the year

India's current account deficit likely jumped to a near-decade high: Poll

India's current account deficit likely widened to its highest in nearly a decade in the April-June quarter, driven by soaring global commodity prices and the biggest capital outflows

Best of BS Opinion: Policy balance, slowdown in global demand, and more

Here is the best of Business Standard's opinion pieces for Thursday