BANKING AFFAIRS

Detailed explanation-1: -MUMBAI : India’s current account deficit (CAD) widened to a nine-year high of 4.4% of gross domestic product (GDP) in the three months to September, up from 2.2% in the June quarter, primarily due to a widening goods trade deficit and an increase in net outgo under investment income.

Detailed explanation-2: -The current account deficit for Q1:2022-23 has been revised downwards from US$ 23.9 billion (2.8 per cent of GDP) due to downward adjustment in Customs data.

Detailed explanation-3: -As a percentage of GDP, India’s July-September CAD is 4.4 percent as against 2.2 percent in April-June and 1.3 percent in July-September 2021. For the half-year ended September, the deficit is 3.3 percent of GDP, sharply higher than the 0.2 percent in April-September 2021.

Detailed explanation-4: -The current account deficit (CAD) occurs when a country’s import value of goods and services surpasses its export value. It is one of the twin deficits, which can impact the stock market and investors, the other being fiscal deficit.

Detailed explanation-5: -For April-September 2022 (H1FY23), the country’s current account deficit shot up to 3.3 per cent of GDP from 0.2 per cent in H1FY22 due to a sharp increase in the merchandise trade deficit.