India’s current account deficit (CAD) narrowed to USD 1.3 billion, or 0.2% of GDP, during the January-March quarter of fiscal year 2023, according to RBI data released on Tuesday. This was mainly due to a moderate trade deficit and strong growth in service exports.
“India’s CAD to decline to US$ 1.3 billion (0.2 per cent of GDP) in Q4 of 2022-23, from US$ 16.8 billion (2.0 per cent of GDP) in Q3 of 2022-231 and to US$ 13.4 billion (0.2 per cent of GDP) in Q3 of 2022-231. 1.6 per cent) of a year ago,” the Reserve Bank said.
The balance of payments of a country can be accurately measured using CAD. The trade deficit narrowed to US$ 52.6 billion from US$ 71.3 billion in the previous quarter, which was mainly attributed to the sequential decline in the CAD in Q4 of the previous financial year. Additionally, strong services exports contributed to the deceleration in the CAD.
According to RBI, the increase in net earnings from computer services contributed to the increase in net services receipts both sequentially and year-on-year.
The central bank informed that the balance of payments (BoP) foreign exchange reserves increased by $5.6 billion in the fourth quarter of the financial year 2021-2022. This represents a significant improvement, compared to a decrease of $16.0 billion in the previous quarter.
In any case, for the entire fiscal year 2022-2023, the running record balance is projected to be a shortfall of 2% of GDP, showing a higher shortfall than the 1.2% shortfall in the previous year (2021-2022). Is. The trade deficit, which widened to $265.3 billion from $189.5 billion a year earlier, was mainly responsible for this increase in the deficit.
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