India's current account deficit (CAD) climbed
sharply due to a rise in gold imports and a fall in export growth.
CAD rose to $10.1 billion (2.1 per cent of gross
domestic product) in the financial year's second quarter, ending September,
compared to $5.2 bn (1.2 per cent of GDP) for July-September 2013.
The deficit was $7.8 bn (1.7 per cent of GDP) in the
first quarter ended June, according to Reserve Bank of India (RBI) data. Despite the rise, the CAD remains
within RBI's comfort zone of 2.5 per cent of GDP.
The CAD for the year's first half, April-September
2014, was $17.9 bn (1.9 per cent of GDP) as against $26.9 bn (3.1 per cent of
GDP) for April-September 2013.
The balance of payments (BoP) was in positive
territory. The accretion to foreign exchange reserves was $6.9 bn in the second
quarter as against a drawdown of $10.4 bn in Q2 of 2013-14.
RBI said the increase in CAD was primarily on
account of a higher trade deficit, contributed by both a deceleration in export
growth and a rise in imports. The trade deficit expanded to $38.6 bn in
July-September from $33.3 bn in the same period of FY14.
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