Ind-Ra lowers CAD estimates: New Current Account Deficit Pegged at 1.3-1.5
Q. India Ratings and Research has revised FY17 estimates of CAD from 1.2 percent to how much?- Published on 20 Jun 16a. 1.3-1.4
b. 1.4-1.5
c. 1.3-1.5
d. 1.3-1.6
ANSWER: 1.3-1.5
Ind-Ra lowered FY2017 CAD estimate to 1.3-1.5 percent from 1.2 percent due to lower remittances and software earnings in forth quarter for current fiscal. India’s CAD narrowed sharply to USD 0.3 billion/o/1 percent of GDP in Q4, FY2016 from USD 7.1 billion or 1.3 percent in Q3 on account of lower trade gap.
- For the 2015-2016 fiscal, CAD or the difference in the in and outflow of foreign exchange fell to 1.1 percent of the GDP
- Low CAD indicates stability on the external front. On the one hand, low crude prices and collapse in global prices of commodities have resulted in lower trade deficit
- Low oil prices have caused Middle East economies to suffer as well.
- Remittances on private transfers fell to USD 63.1 billion in 2015-2016
