Govt source says fiscal deficit may widen more

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A government source said the fiscal deficit could widen more than targeted for the year ending in March, potentially requiring additional market borrowing.

The government source said the fiscal deficit could reach 5.5 to 5.6 per cent of gross domestic product in 2012/13, which could require additional market borrowing of 350-400 billion rupees.

The benchmark 10-year bond yield rose to as high as 8.23 per cent, up 3 basis points from levels before the news. The yield was last trading at 8.22 per cent compared to its 8.21 per cent close on Wednesday.