India’s Current Account Deficit (CAD) is projected to exceed 2% of GDP in the third quarter of FY25 due to a sharp rise in gold imports, as per a report by Bank of Baroda. The report highlights concerns about the impact of gold imports on the country’s trade balance.

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• CAD in Q3 FY25 expected to rise above 2% of GDP, driven by increased gold imports.
• Bank of Baroda report identifies gold import surge as the primary factor behind the widening deficit.
• High global gold prices and domestic demand contribute to rising imports.
• Increased CAD could pressure the Indian rupee and affect forex reserves.
• Surge in non-essential imports like gold may impact the country’s trade balance.
• Q2 FY25 CAD was reportedly manageable due to lower crude oil prices.
• Experts suggest tighter import policies to mitigate the rising CAD.
• CAD reflects the gap between a country’s imports and exports of goods, services, and capital.
• Persistent CAD above 2% can pose risks to economic stability and investor confidence.
• Policymakers may explore measures to curb non-essential imports and boost exports.