India Reports CAD of 1.2% of GDP in FY22 on widening Trade Deficit

Current Context: As per RBI data India witnessed a current account deficit of 1.2% of GDP in 2021-22 compared to a surplus of 0.9% in FY2020-21 due to a wider trade deficit.

• From January-March 2022 the CAD decreased on to $13.4 billion or 1.5% of GDP compared to $22.2 billion.
• In addition to that Balance of Payments, data suggested that goods imports stood at $618.6 billion in FY22 as compared to $398.5 billion the year ago.
• BoP of a country can be defined as a systematic statement of all economic transactions of a country with the rest of the world during a specific period, usually one year.
• A current account deficit occurs when the total value of goods and services a country imports exceeds the total value of goods and services it exports.
• According to an earlier report for 2021, High Oil Imports, and High Gold Imports are the major driving force, widening the CAD.

Question:

Q.1 According to recent RBI data current account deficit has widened to __________ percentage of GDP in 2021-22?
a. 3.2%
b. 1.5%
c. 1.2%
d. 2.5%