Mumbai: India’s current account deficit (CAD) declined sharply to 1% of the GDP in the second quarter of this financial year ended September 2023. The current account deficit stood at $8.3 billion. Data released by the Reserve Bank of India (RBI) revealed this. As per RBI, the lower merchandise trade deficit and growth in services exports are the main reason for this.
The current account deficit (CAD) had stood at 3.8% of GDP or $30.9 billion in the July-September quarter of 2022-23. CAD was $9.2 billion or 1.1% of GDP in the first quarter (April-June) of the current financial year 2023-24.
‘Underlying the lower current account deficit on a year-on-year (y-o-y) basis in Q2:2023-24 was the narrowing of merchandise trade deficit to USD 61.0 billion from USD 78.3 billion in Q2:2022-23,’ said the data on Developments in India’s Balance of Payments during the second quarter (July-September) of 2023-24.
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Services exports grew by 4.2% on a y-o-y basis on the back of rising exports of software, business and travel services. Net services receipts increased both sequentially and on a y-o-y basis.
Meanwhile, external commercial borrowings recorded an outflow of $1.8 billion in Q2FY24, compared to a net outflow of $0.5 billion a year ago. Non-resident deposits showed net inflows of $3.2 billion, as against net inflows of $2.5 billion in Q2FY23.
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