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Current account deficit to be at 4.2 per cent level in 2012-13: Rangarajan

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New Delhi: 

The current account deficit is likely to be around the last year's level of 4.2 per cent of the gross domestic product (GDP) for 2012-13 fiscal, Prime Minister's Economic Advisor Council chairman C Rangarajan said today.

"I think CAD (current accound deficit) as a year whole in current fiscal may be in the same region as it was last year which was 4.2 per cent of GDP," Mr Rangarajan said.

Current account deficit, which represents the difference between exports and imports after considering cash remittances and payment, widened to a record high of 5.4 per cent of GDP, or $22.3 billion, in July-September quarter.

"The export sector will be much better in the second half of the (fiscal) year than the first half," Mr  Rangarajan said.

He said that in the past capital inflows though foreign domestic investment, foreign institutional investment, external commercial borrowings or NRI deposits, have been adequate to cover the current account deficit. "I believe for the year as whole capital inflows will be adequate to cover CAD of the current fiscal year," he added.

On the rupee movement, he said when there is a mismatch between capital flows and current account deficit, it shows pressure on the currency.

"As a year, capital inflows would be adequate to cover the current account deficit. And therefore, I do not expect the rupee to change much," Mr Rangarajan said.

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