India’s current account deficit hits 2.5% of GDP at $16.9 bn
01 Apr 2019
1
India’s current account deficit (CAD) stood at $16.9 billion (or 2.5 per cent of its GDP) in Q3 of 2018-19 (October-December 2018-19), up from $13.7 billion (2.1 per cent of GDP) in Q3 of 2017-18, but down from $19.1 billion (2.9 per cent of GDP) in the preceding quarter, preliminary figures released by the Reserve Bank of India (RBI) showed.
The widening of the CAD on a year-on-year (y-o-y) basis was primarily on account of a higher trade deficit at $49.5 billion compared with $44.0 billion a year ago.
Net services receipts increased by 2.8 per cent on a y-o-y basis mainly on the back of a rise in net earnings from telecommunications, computer and information services and financial services.
Private transfer receipts, mainly representing remittances by Indians employed overseas, amounted to $18.7 billion, increasing by 6.3 per cent from their level a year ago.
In the financial account, net foreign direct investment at $7.5 billion in Q3 of 2018-19, increased from $4.3 billion in Q3 of 2017-18.
Portfolio investment recorded net outflow of $2.1 billion in Q3 of 2018-19 compared with an inflow of $5.3 billion in Q3 last year. This was mainly on account of net sale in the equity market.
Net inflow on account of external commercial borrowings increased to $2.0 billion in Q3 of 2018-19 from $0.3 billion a year ago.
In Q3 of 2018-19, there was a depletion of $4.3 billion of the foreign exchange reserves (on BoP basis) against an accretion of $9.4 billion in Q3 of 2017-18.
During the first nine months of the 2018-19 financial year (April-December 2018-19), India’s CAD increased to 2.6 per cent of GDP from 1.8 per cent of GDP in April-December 2017, on the back of widening of the trade deficit.
India’s trade deficit increased to $145.3 billion in April-December 2018 from $118.4 billion in April-December 2017.
Net invisible receipts were higher in April-December 2018 mainly due to increase in net services earnings and private transfer receipts, RBI noted.
Net FDI inflows in April-December 2018 increased to $24.8 billion from $23.9 billion in April-December 2017.
Portfolio investment recorded a net outflow of $11.9 billion in April-December 2018 against an inflow of $19.8 billion a year ago.
In April-December 2018, there was a depletion of $17.5 billion of the foreign exchange reserves (on a BoP basis).
.webp)
