FY19 CAD inches up to 2.1% of GDP in FY19

Mumbai: Current account deficit (CAD) increased to $57.2 billion or 2.1 per cent of GDP in FY19 as against 1.8 per cent in the previous year, the Reserve Bank said on Friday. The CAD, which is the net of foreign exchange inflows and outflows, had stood at $48.7 billion in FY18.

For FY19, the deficit widened despite a narrowing of the same in the March quarter to 0.7 per cent of GDP or $4.6 billion, as against $27.7 billion or 2.7 per cent in the December quarter and $13 billion or 1.8 per cent in the March 2018 quarter, the central bank data showed.

Overall trade performance was the prime influencer for both the contraction in CAD for the March quarter as well as a widening for the full year. A lower trade deficit of $35.2 billion in the March quarter, compared to $41.6 billion in the year-ago period helped in CAD contraction, it said.