New Delhi, Dec 30
Even as India’s merchandise trade deficit has come under some pressure, robust services exports and healthy remittances flow should help keep the country’s current account deficit (CAD) in the safe zone during the current financial year (FY 2024-25), according to a Crisil report released on Monday.
“We expect CAD at about 1.0 per cent of GDP in fiscal 2024-25, as against 0.7 per cent last year. In addition, the impact of geopolitical issues will remain a monitorable,” the report stated.
The Crisil report highlights that India’s current account deficit (CAD) was largely unchanged at $11.2 billion (1.2 per cent GDP) in the second quarter (July-September) of fiscal year 2024-25 compared with $11.3 billion (1.3 per cent of GDP) in the corresponding year-ago quarter. Sequentially, though, the metric, which reflects a country’s external payments position, widened slightly from $10.2 billion (1.1 per cent of GDP) in the first quarter.
A key metric, CAD was $21.4 billion (1.2 per cent of GDP) in the first half of fiscal 2025, as against $20.2 billion (1.2 per cent of GDP) in the year-ago period.
Although CAD moderated and financial inflows increased, the rupee depreciated to 83.8/$ in the second quarter (Q2) of this fiscal versus 82.7/$ in Q2 of 2024, the report points out.