CAD to come down to 2.5% of GDP in 2-3 years, says Montek

Planning Commission deputy chairman Montek Singh Ahluwalia on Wednesday expressed confidence that the current account deficit will come down to 2.5 per cent of GDP in the next two to three years from about 5 per cent currently.

"Traditionally we have seen it (current account deficit) at 2.5 per cent of the GDP at comfortable level. I think we will take at least two to three years to get there... I think this country for another 20 years can run CAD at around 2.5 per cent of GDP," he said.

Ahluwalia was addressing a meeting of the Asia Pacific Regional Committee here.

He said while bringing in investments, it is also necessary to manage the high current account deficit. "There is no known forecast of India's macro economy that does not involve the significant current account deficit. If we have the capacity to grow at 8 per cent, it is extremely unlikely that the industrialised countries will grow at 8 per cent," he said.

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