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India January-March Current Account Deficit Narrows Sequentially

Thursday,   23-Jun-2022   10:06 AM (IST)

India’s current account deficit narrowed in January-March from the previous quarter, due to a moderation in trade gap and lower net outgo of primary income. The current account deficit was at $13.4 billion, or 1.5% of gross domestic product, in the fourth quarter of the last fiscal year that ended Mar. 31, as against deficit of $22.2 billion, or 2.6% of GDP in October-December, data from the Reserve Bank of India showed. India had posted a current account deficit of $8.1 billion, or 1% of GDP, in January-March last year. “Net outgo from the primary income account, largely reflecting net income payments on foreign investment, decreased sequentially as well as on a y-o-y basis,” the central bank said in a statement. There was a drawdown of $16 billion to India’s foreign exchange reserves on a balance of payments basis in January to March, against an accretion of $3.4 billion in the year-ago period, the RBI said. For the full financial year, the current account deficit was at 1.2% of GDP versus current account surplus of 0.9% in the previous fiscal year, as the trade deficit widened to $189.5 billion from $ 102.2 billion a year ago. On balance of payment basis, the accretion to the reserves in the 12 months was $47.5 billion, according to the central bank.