At 4.9% in April-june, may fall this quarter

Sharp fall in gold imports, rebound in exports likely to bring down CAD further; US, Europe may also aid recovery

NEW DELHI: India’s current account deficit (CAD) — the difference between dollar inflows and outflows— stood at 4.9% of GDP or $21.8 billion in Apriljune 2013-14 from 4% or $16.9 billion a year-ago, data released on Monday showed.

The gap, however, is expected to taper down in the coming quarters aided by a sharp slump in gold imports and a smart rebound in exports amid early signs of recovery in the US and Europe boosting shipment orders.

Gold imports stood at $16.5 billion in April-june this year compared with $9.1 billion worth of inward shipments of the yellow metal during the same quarter of the previous year.

“Excluding the increase in gold imports, CAD would work out to $ 14.5 billion, or about 3.2% of GDP,” the RBI said in its quarterly balance of payments statement.

CAD had declined to 3.6% in the January-march quarter after touching a record high of 6.5% in the October-december quarter.

Over the past three months, the government and the RBI have launched a number of steps to attract foreign capital to arrest the rupee’s slide and contain the CAD that hit a record high of 4.8% of GDP last year.

Last week, it relaxed norms for domestic companies to trade shares on foreign bourses aimed at attracting dollar inflows. The move followed other measures including import curbs and higher customs duties on gold.