High current account deficit not because of gold imports only: Dr SK Ghosh, SBI

In a chat with ET Now, Dr SK Ghosh, Chief Economic Adviser, Economic Research Department, State Bank of India, shares his views on gold imports. Excerpts:

ET Now: Do you agree with the interpretation, as far as gold imports are concerned, that it will never go back to the highs that we saw earlier, but it will increase, and what kind of damage will that do to our current account deficit?

Dr SK Ghosh: There has been an uptick in gold imports in the current fiscal and the last month data is supposed to be out anytime. Yes, gold imports have contributed, but we had actually done a study which showed that gold imports are not the only reason which has contributed to the high current account deficit. There were other reasons also. This year gold imports are on the higher side, but I do not think it is going to break through to the levels which we witnessed -- in excess of 50 billion -- in the year 2012, when the current account deficit touched around 8 billion.

The imports will show some traction this year because there has been an increase in the pulses import, there is going to be some frontloading of the coal imports, but gold I believe should not be a problem in the current fiscal also.