New Delhi: India recorded a current account surplus of $5.7 billion or 0.6 per cent of GDP in the March 2024 quarter. Data released by the Reserve Bank of India (RBI) showed this. This marks a significant improvement from the year-ago period, where the country had a current account deficit of $1.3 billion or 0.2 per cent of GDP.
A current account surplus is a positive current account balance, indicating that a nation is a net lender to the rest of the world. A current account deficit indicates that a country is importing more than it is exporting. Emerging economies often run surpluses, and developed countries tend to run deficits.
In the preceding quarter ending December 2023, the deficit was at $8.7 billion or 1 per cent of GDP. For the entire fiscal year 2023-24 (FY24), India’s current account deficit sharply narrowed to $23.2 billion, representing 0.7 per cent of GDP. It was at $67 billion or 2% of GDP in the previous fiscal year (FY23).
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‘India’s CAD moderated to $23.2 billion at 0.7 per cent of GDP for 2023-24 as against $67 billion at 2 per cent of GDP for 2022-23. This is on the back of the lower merchandise trade deficit. Portfolio investment jumped on a net inflow of $44.1 billion as against net outflow of $5.2 billion a year ago. FDI inflow stood at $9.8 billion as against $28 billion a year ago. Accretion to forex reserves was $63.7 billion,’ said Anil Kumar Bhansali, head of treasury and executive director of Finrex Treasury Advisors LLP.
During the March 2024 quarter, net outgo on the primary income account, primarily reflecting payments of investment income, increased to $ 14.8 billion from $ 12.6 billion a year ago. Private transfer receipts, mainly representing remittances by Indians employed overseas, amounted to $ 32.0 billion, an increase of 11.9 per cent over their level a year ago. In the financial account, net foreign direct investment flows were $ 2.0 billion in Q4:2023-24 as compared with $ 6.4 billion a year ago.
Foreign portfolio investment recorded a net inflow of $ 11.4 billion in Q4:2023-24 as against a net outflow of $ 1.7 billion during Q4:2022-23. Net inflows under external commercial borrowings to India amounted to $ 2.6 billion in Q4:2023-24 as compared with $ 1.7 billion a year ago.
Non-resident deposits recorded a higher net inflow of $ 5.4 billion than $ 3.6 billion in Q4:2022-23. Portfolio investment recorded a net inflow of $44.1 billion as against an outflow of $5.2 billion a year ago.Net FDI inflow was $9.8 billion during 2023-24 as compared with $28.0 billion in 2022-23.
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