Explaining the slide in CAD4 min read 04 Oct 2016, 01:23 AM IST
A gradual rise in commodity prices and revival of the capex cycle will lead to a higher current account deficit
Since India has conventionally had a current account deficit (CAD), an expected surplus in the first quarter of FY17 generated significant interest. Even though the actual current account (CA) turned out to be in marginal deficit, the unusually low level warrants some explanation. Is this a signal of a slowing economy, belying expectations of green shoots of recovery? Was the lower CAD a one-off event, or are there structural changes in India’s economic activity?
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