Current Account Deficit

January 4, 2012

For those Indian businesses with excessive imports, exports, FE denominated loans the coming days are appearing tough……..

 

Signs of India’s growing vulnerability to external shocks are clear as per RBI. The Current Account Deficit (CAD) is increasing, while on the other hand the exports and remittances are  unlikely  to salvage the situation, as they did last financial year; exports because external demand will collapse, especially if the euro zone crisis is not contained, and remittances because they may be too small in absolute numbers to make up the shortfall. (recommended reading : enclosed two articles)