Follow Us:
Monday, July 04, 2022

CAD likely to stay below 1 per cent of GDP this year: DBS report

According to the global financial services major DBS, the widening of the trade deficit will be "watched closely", especially at a time when the services sector receipts and private transfers are under pressure.

By: PTI | New Delhi |
October 17, 2016 3:19:05 pm

India’s current account deficit is likely to stay below 1 per cent of GDP this year, largely due to a sharp fall in the trade deficit as against 2015, says a DBS research report. India’s trade deficit in September stood at USD 8.33 billion when the trade gap was the highest in the last nine months.

According to the global financial services major DBS, the widening of the trade deficit will be “watched closely”, especially at a time when the services sector receipts and private transfers are under pressure.

“That said, a sharp fall in the trade deficit vis-à-vis last year suggests this year’s current account deficit is likely to stay below 1 per cent of GDP from (-) 1.1 per cent in 2015-16,” DBS said in a research note.

In September, exports went up 4.62 per cent to USD 22.9 billion, while the country’s imports contracted by 2.54 per cent to USD 31.22 billion, leaving a trade deficit of USD 8.33 billion.

Subscriber Only Stories
Skin Allergies In Children – What parents need to know?Premium
What makes KuCoin P2P Trading Platform a Good Choice To Buy Crypto?Premium
Airtel Demonstrates Immersive Video Entertainment On 5G; Recreates Kapil ...Premium
Is It A Good Idea To Keep One Account For All Your Financial Transactions?Premium

The trade gap was USD 11.66 billion in December 2015 while in September 2015, it stood at USD 10.16 billion. Regarding inflation and the consequent policy action, the report said that the Reserve Bank’s policy decisions are likely to primarily take direction from CPI trends.

“Policy decisions are likely to primarily take direction from CPI trends, where the direction will be favourable over the next few months,” the report said adding that policymakers are also likely to balance rate easing against demand dynamics in the pipeline and likelihood of US rate normalisation before year-end.

Reversing its seven-month uptrend, wholesale inflation eased to 3.57 per cent, while retail inflation fell to 13-month low of 4.31 per cent in September. The Monetary Policy Committee headed by RBI Governor Urjit Patel last week cut benchmark interest rates by 0.25 per cent to 6.25 per cent.

Hot Offer Putin claims victory in Mariupol, leaving Ukrainian defenders holed up Subscribe Now

📣 Join our Telegram channel ( The Indian Express ) for the latest news and updates

For all the latest Business News, download Indian Express App.

  • Newsguard
  • The Indian Express website has been rated GREEN for its credibility and trustworthiness by Newsguard, a global service that rates news sources for their journalistic standards.
  • Newsguard
Latest Comment
Post Comment
Read Comments
Advertisement
Advertisement
Advertisement
X