India’s CAD was 1% in Q2FY24 and it was 2% in Q3FY23. India Ratings expects the current account deficit to dip in Q4FY24.
With an estimated current account deficit (CAD) of around $11 billion or 1.2% of GDP, the third quarter CAD will likely be the highest during the current financial year, India Ratings said on Tuesday.
India’s CAD was 1% in Q2FY24 and it was 2% in Q3FY23. India Ratings expects the current account deficit to dip in Q4FY24.
“Ind-Ra expects the merchandise exports to increase to around $117 billion in Q$FY24, up 2% yoy. This would be a seven-quarter high. Likewise, the merchandise imports are expected to touch a six-quarter high of around $180 billion in Q$FY24, up 8% yoy. Overall, Ind-Ra expects the goods trade deficit to moderate to $64 billion in Q$FY24,” said Sunil Kumar Sinha, Principal Economist, Ind-Ra.
“Ind-Ra opines the services trade surplus to sustain the record-breaking run and stand at a fresh high of $47 billion in Q4FY24”, said Paras Jasrai, Senior Analyst, Ind-Ra.
Merchandise exports grew1.1% yoy in Q3FY24. A favourable base effect and a pickup in demand from the US, the UAE and the Netherlands helped goods exports grow after a year. However, sequentially, goods exports were down to $105.7 billion in Q3FY24 from $107.4 billion in Q2FY24.
The top 10 items which pulled up the annual growth in goods exports in Q3FY24 were gold and other precious metal jewellery, iron ore, drug formulations, biologicals, telecom instruments, aircraft, spacecraft and parts, cotton yarn, basmati rice, buffalo meat, electric machinery and equipment, and copper and related products.
The merchandise imports increased to a year high of $176.2 billion in Q3FY24. The imports of intermediate and consumer durable goods were at a record high of $40.23 billion and a five-quarter high of $39.58 billion, respectively, in Q3FY24. These goods grew 13.3% yoy and 18.9% yoy, respectively, in the same period.
Source:financialexpress.com