Economy

CAD seen at 1.4% by March as crude soars                      

·         The current account measures the flow of products, services, and investments into and out of the country.

·         It represents a country’s foreign transactions and, just like the capital account, may be a element of a country’s Balance of Payments (BOP).

·         There may be a deficit in current account if the worth of the products and services foreign exceeds the worth of these exported.

·         A nation’s current account maintains a record of the country’s transactions with different nations that includes net profit, together with interest and dividends, and transfers, like economic aid.

·         It includes of following components: Trade of products, Services, and net earnings on overseas investments and internet transfer of payments over a period of your time, like remittances.

·         It is measured as a percentage of GDP.

·         The formulae for calculative CAD is: current account = trade gap + internet current transfers + net income abroad trade gap = Exports – Imports a country with rising CAD shows that its become uncompetitive, and investors might not be willing to invest there.

·         In India, this Account Deficit may be reduced by boosting exports and curbing non-essential imports like gold, mobiles, and electronics.

·         Current Account Deficit and financial Deficit (also called “budget deficit” may be a situation once a nation’s expenditure exceeds its revenues) are along known as twin deficits and each usually reinforce one another, i.e., a high financial  deficit ends up in higher CAD and vice versa.