Mumbai (PTI): The country’s current account deficit widened to 2.5% of GDP in the third quarter of the current fiscal year from 2.1% a year ago, primarily due to a higher trade deficit, the Reserve Bank of India (RBI) said on Friday.

In absolute terms, CAD, or the gap between inflow and outflow of foreign exchange in the current account, was $16.9 billion during the October-December 2018 period, up from $13.7 billion in the year-ago period.

The deficit, however, had moderated to $19.1 billion, or 2.9% of GDP, in the preceding quarter (July-September).

“The widening of CAD (current account deficit) on a year-on-year basis was primarily on account of a higher trade deficit at $49.5 billion compared with $44.0 billion a year ago,” the RBI said in a statement.

CAD increased to 2.6% of GDP during the April-December 2018 period, from 1.8% in April-December 2017 on the back of a widening trade deficit.

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