The country’s current account deficit (CAD) is likely to treble to $10-12 billion in the fourth quarter of the current financial year, against the same year-ago period, due to higher trade deficit, says a report.
The current account deficit had increased to $13.5 billion, or 2 per cent of the gross domestic product (GDP) in the third quarter as well, against $ 8 billion, or 1.4 per cent of GDP in the same year-ago period.
“We expect the current account deficit to widen to $10-12 billion in Q4 FY18 from the low $3.4 billion in Q4 FY17, led by the increase in the merchandise trade deficit, even as the services trade surplus is expected to improve,” rating agency Icra said in a note on Thursady. With this, the agency expects the current account deficit to rise to $46-48 billion, or 1.8 per cent of GDP, in financial year 2017-18.