Confident of containing CAD below $60 billion: FM

Finance Minister P Chidambaram exuded confidence that India’s current account deficit (CAD) will be contained below USD 60 billion this financial year as against an earlier estimate of USD 70 billion.

“We think we can peg it (CAD) at USD 60 billion or below. I am confident that we can do even slightly better than USD 60 billion,” he said.

The CAD, the difference between the inflow and outflow of foreign exchange, had touched an all-time high of USD 88.2 billion, or 4.8 per cent of GDP, in the last fiscal.

The deficit for April-June was at USD 21.8 billion or 4.9 per cent of GDP. High gold imports was one of the main reasons that pushed CAD to a record high in the previous financial year.

However, various curbs put in by both RBI and the Centre had helped in containing gold imports this fiscal.

On impact of the US Federal Reserve’s gradual stimulus withdrawal, Chidambaram said the tapering will happen, but both the markets as well as the government are prepared to deal with it.