<p>The finance ministry on Tuesday agreed that the current account deficit (CAD) would widen in the current financial year but stopped short of putting any number to it.</p>.<p>“The current account deficit position will not be as good as last year but India has sufficient foreign exchange reserve to defend the situation that may arise,” a top source in the finance ministry said.</p>.<p>Various agencies including brokerages have raised concerns of rise in the CAD to the extent of close to 3% in the fiscal ending March 2019 with the rise in oil prices, depreciation in the rupee and the foreign investors turning the other way.</p>.<p>According to government sources, India's crude oil import bill is likely to jump by about $26 billion in 2018-19 as the nosediving rupee has made offshore oil purchase costlier.</p>.<p>India's trade deficit or a gap between exports and imports has already been widening due to a higher oil import bill. This trade shortfall is expected to put pressure on the current account deficit, a key vulnerability for the economy.</p>.<p>CAD essentially means a country buys more goods and services than it sells. It is the difference between the inflow and outflow of foreign exchange. CAD widened to 1.9% of the GDP last fiscal ending March 2018. Certain agencies like Nomura and Moody's have predicted it may reach above 2.5%-2.8% by March 2019.</p>.<p>India's net oil imports accounted for an estimated 2.6% of GDP in the financial year 2017-18 and are expected to increase in the current financial year.</p>.<p>Another factor which has the bearing on CAD is the country's gold imports. Gold imports increased by 22.31% to $33.65 billion in 2017-18, the government data showed.</p>.<p>Imports of the yellow metal stood at $27.51 billion in 2016-17. In 2015-16, the imports aggregated at $31.7 billion.<br /> </p>
<p>The finance ministry on Tuesday agreed that the current account deficit (CAD) would widen in the current financial year but stopped short of putting any number to it.</p>.<p>“The current account deficit position will not be as good as last year but India has sufficient foreign exchange reserve to defend the situation that may arise,” a top source in the finance ministry said.</p>.<p>Various agencies including brokerages have raised concerns of rise in the CAD to the extent of close to 3% in the fiscal ending March 2019 with the rise in oil prices, depreciation in the rupee and the foreign investors turning the other way.</p>.<p>According to government sources, India's crude oil import bill is likely to jump by about $26 billion in 2018-19 as the nosediving rupee has made offshore oil purchase costlier.</p>.<p>India's trade deficit or a gap between exports and imports has already been widening due to a higher oil import bill. This trade shortfall is expected to put pressure on the current account deficit, a key vulnerability for the economy.</p>.<p>CAD essentially means a country buys more goods and services than it sells. It is the difference between the inflow and outflow of foreign exchange. CAD widened to 1.9% of the GDP last fiscal ending March 2018. Certain agencies like Nomura and Moody's have predicted it may reach above 2.5%-2.8% by March 2019.</p>.<p>India's net oil imports accounted for an estimated 2.6% of GDP in the financial year 2017-18 and are expected to increase in the current financial year.</p>.<p>Another factor which has the bearing on CAD is the country's gold imports. Gold imports increased by 22.31% to $33.65 billion in 2017-18, the government data showed.</p>.<p>Imports of the yellow metal stood at $27.51 billion in 2016-17. In 2015-16, the imports aggregated at $31.7 billion.<br /> </p>
