Surging crude may take CAD past 2% of GDP, say economists

Economists predict that India’s Current Account Deficit (CAD) will increase in the second half of the fiscal year, surpassing 2% of GDP. The CAD for the June quarter was 1.1% of GDP, lower than expected, but the gap widened due to a contraction in the trade deficit. Rising crude oil prices, particularly for Russian crude, which accounts for a third of India’s fuel imports, are a major factor contributing to the widening CAD. If oil prices average $100 per barrel in the second half of the fiscal year, the CAD could reach 2.1% of GDP.