India: current account deficit widens but outlook improves | beyondbrics

India: current account deficit widens but outlook improves | beyondbrics: "Are Indian policy makers delivering on their promises? Here’s one to watch.

India’s finance minister Palaniappan Chidambaram has vowed that the country’s unsustainable current account deficit will be brought down this year. So what do the latest figures, released by the central bank after markets closed on Monday, show?

India’s current account deficit grew to 4.9 per cent of GDP in the first three months of this financial year to $21.8bn, from $18.1bn and 4.0 per cent of GDP in the previous quarter. Although that might not look like progress, it’s better than a Bloomberg survey which was forecasting a $23bn deficit.

The culprit for the widening deficit? It was the usual suspect, gold. Leave out gold imports and the current account deficit stood at 3.2 per cent of GDP, or $14.5bn, in the quarter."

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