Current Account Deficit seen at 1.3%

Ind-Ra (India Ratings and Research) expects the current account deficit (CAD) to come in close to 1.3% of gross domestic product (GDP) in FY-16. On March-21st Reserve Bank of India(RBI) data showed, CAD narrowed to 1.3% of GDP in third quarter of the fiscal as against 1.5% in the same period last year, mainly on account of lower trade deficit. A lower CAD in 3rd Quarter FY-16 was mainly due to a lower trade deficit of $34.0 billion than $37.4 billion in 2nd Quater FY-16. Despite a moderation in net invisible receipts, CAD on a cumulative basis narrowed to 1.4% of GDP during April to December 2015 from 1.7% in the corresponding period a year ago. Net invisible receipts moderated to $26.9 billion in 3QFY16 from $28.7 billion in 2QFY16 led by services receipts and private transfers, said Ind-Ra report.