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Saturday, June 3, 2023

Rbi: Current account deficit narrows to 2.2% of GDP in Q3: RBI data

MUMBAI: India current account deficit, a key indicator of the country’s external sector, fell to USD 18.2 billion or 2.2% of GDP in the December quarter of the current fiscal year. The decline was mainly due to a narrowing merchandise trade deficit, according to data released by the Reserve Bank of India (runs batted in) on Friday.
The current account deficit (SCOUNDREL) was USD 30.9 billion or 3.7% of GDP in the second quarter of 2022-23 and USD 22.2 billion or 2.7% of GDP in the December quarter of 2021-22.
“Behind the lower current account deficit in Q3 2022-23 was the merchandise trade deficit narrowing to $72.7bn from $78.3bn in Q2 2022-23, along with strong services and private transfer receipts” said RBI.
Services exports recorded year-on-year growth of 24.5% thanks to increased exports of software, business and travel services. Net service income increased both sequentially and year-over-year.
In the December quarter, net foreign direct investment decreased to USD 2.1 billion from USD 4.6 billion in the same period a year earlier.
Net foreign portfolio investment recorded inflows of $4.6bn in the December quarter versus an outflow of $5.8bn in the third quarter of 2021-22.
RBI said primary income account net spending, which mainly reflects investment income payments, rose to $12.7bn from $11.5bn in the same period a year earlier.
Private transfer receipts, which mainly represent remittances from Indians employed abroad, amounted to US$30.8 billion in the December quarter, up 31.7% from their level a year ago.
Non-resident deposits recorded net inflows of $2.6 billion in the third quarter of the current fiscal year compared to net inflows of $1.3 billion in the same period last year.
According to RBI data, India posted a current account deficit of 2.7% of GDP during the April-December 2022 period compared to a deficit of 1.1% during the April-December 2021 period.

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