Published 14:12 IST, March 12th 2024
Current Account Deficit likely to hit 1.2% of GDP in Q3: India Ratings
According to India Ratings, Q3 of FY24 witnessed a 1.1 per cent YoY growth in merchandise exports.
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CAD in Q3: The current account deficit (CAD) is likely to hit $11 billion or 1.2 per cent of the GDP in the third quarter of 2023-24, a report by India Ratings said on Tuesday. The uptick, albeit marginal from the preceding quarter, marks a significant jump from the same quarter last year.
Projections for Q4FY24
Despite the global economic atmosphere's lingering uncertainties, Ind-Ra projects a potential dip in the current account deficit for the fourth quarter of FY24. Sunil Kumar Sinha, Principal Economist at Ind-Ra, points to emerging positive signals, notably the expansion of the global manufacturing Purchasing Managers' Index (PMI) for the first time in 17 months.
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Anticipating a surge in merchandise exports and moderation in the goods trade deficit, Ind-Ra foresees an optimistic trade scenario for Q4FY24. The predicted seven-quarter high for merchandise exports at $117 billion highlights resilience in India's export performance.
According to India Ratings, Q3 of FY24 witnessed a 1.1 per cent YoY growth in merchandise exports. The rise, fueled by demand spikes from key partners like the US, the UAE, and the Netherlands, manifested in sectors like gold, iron ore, and telecom instruments.
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Import Dynamics and Price Volatility
On the import front, Q3FY24 showcased a noteworthy increase, hitting a yearly high of $176.2 billion. Key import categories such as intermediate and consumer durable goods surged, contributing to the trade narrative. Meanwhile, energy and non-energy prices experienced contractions, while precious metal prices soared to a 10-quarter high.
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14:08 IST, March 12th 2024