The missing BoP crisis

India released its third quarter balance of payments (BoP) data on Friday. The current account deficit in the third quarter of 2011 came in at $19.6 billion. This was in line with expectations. The deficit for the second quarter was revised higher to $18.4 billion from $16.9 billion. India’s current account is in surplus if gold imports are excluded. Indians do not import gold for consumption. It is a form of saving. Therefore, it should be treated as capital outflow and not a current consumption item.

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