How alarming is the CAD?

I noticed that the commentary on the country’s external accounts (balance of payments) for the second quarter of 2012-13 released on December 31 has been considerably more than usual (and I am consequently left with little to add). This is not surprising given the fact that the current account deficit ( CAD) printed at 5.4 per cent of the gross domestic product ( GDP), is almost a percentage point above the average forecast put out by professional economists.

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