India’s current account deficit: smoke and golden mirrors? | beyondbrics

India’s current account deficit: smoke and golden mirrors? | beyondbrics:

"When the Reserve Bank of India put out its latest statement on the nation’s current account deficit on Monday it looked like good news.

The gap narrowed to $5.2bn, or 1.2 per cent of GDP, in the three months to September from $21.0bn, or 5 per cent of GDP, in the same period a year earlier. But are these numbers simply a mirage?

As the RBI said in its statement:

The lower CAD was primarily on account of a decline in the trade deficit as merchandise exports picked up and imports moderated, particularly gold imports."

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