The current account deficit for the April-June quarter of current financial year has come inline with expectation at $16.9 billion or 4.9% of GDP. The reading for the second quarter (July-September) is expected to be better due to growth in exports in Q2 and significant drop in import of gold. The overall CAD for FY14 is expected to be less than 4.0% of GDP. India's Finance Minister has set the FY-14 target for CAD at 3.7% or $70 billion.
| Q1 Fy14 June | ||
| Merchandise trade balance | - $50.5 bn | - $43.8 bn |
| Services (net) | $16.9 bn | $15.0 bn |
| Primary Income* | -$4.8 bn | -$4.9 bn |
| Secondary Income# | $16.7 bn | $6.8 bn |
| Current Account Balance | - $21.8 bn | - $16.9 bn |
| CAD as % of GDP | 4.90% | 4.00% |
With all the recent measures taken by RBI and govt to increase dollar inflows in India and limit the current account deficit at $70 billion in FY-14, the pressure on Indian currency is expected to abate significantly going forward. This should help in keeping the inflationary pressure low and stock markets buoyant.
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