Current Account Deficit (CAD)
The current account is the broadest measure of a country's trade in goods, services, and transfers with the rest of the world. A current account deficit arises when the value of imports (goods + services + net transfers) exceeds exports. It must be financed through the capital account — via foreign direct investment, portfolio flows, external borrowing, or drawdown of foreign exchange reserves.
- India's CAD historically oscillates between 0.5% and 2.5% of GDP; it spiked to 4.8% in FY2012-13 due to gold and oil surge, triggering a currency crisis.
- CAD financing relies on FDI, FII inflows, NRI deposits, and ECBs — all of which are sensitive to global risk sentiment.
- RBI monitors CAD closely as excessive deficits can weaken the rupee, pass through to inflation, and reduce reserve adequacy.
- IMF estimates India's CAD could reach nearly $84.5 billion in 2026 if import pressures persist.
● Tracked since February 16, 2026 · last seen August 08, 2026 · updates as the daily brief publishes
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