Image for representation only. Photo Credit: PTI
India’s current account balance posted a deficit of $36.4 billion (or a nine-year high of 4.4% of GDP) in the quarter ended September, widening from $18.2 billion (2.2% of GDP) in the previous quarter. The deficit for the year-ago period stood at $9.7 billion (1.3% of GDP), according to data released by the Reserve Bank of India (RBI) on Thursday.
The current account deficit in Q2 had widened to $83.5 billion from $63.0 billion in the April-June quarter, the RBI said, adding that there was an increase in net expenditure under investment income.
During the first half ended September, India posted a current account deficit of 3.3% of GDP, again due to a sharp increase in the merchandise trade deficit compared to 0.2% a year earlier.
Net invisible receipts were higher in the first half of the year on a year-on-year (y-o-y) basis due to higher net receipts of services and personal transfers.
Services exports grew by 30.2% year-on-year during the second quarter due to increased exports of software, trade and travel services. Net service receipts grew sequentially and on a year-on-year basis.
Net spending from the primary income account increased to $12 billion from $9.8 billion a year ago, primarily reflecting the payment of investment income in the second quarter.
Private Transfer Receipts mainly represent remittances by Indians employed abroad.
On the financial account, net foreign direct investment declined from $8.7 billion to $6.4 billion.
The second quarter saw higher net foreign portfolio investment inflows of $6.5 billion as compared to $3.9 billion a year earlier.
India’s Net External Commercial Borrowings saw an outflow of $0.4 billion as against an inflow of $4.3 billion.
The data showed that non-resident deposits registered a net inflow of $2.5 billion in the second quarter as against a net outflow of $0.8 billion a year ago.
Foreign exchange reserves (on a balance of payments basis) decreased by $30.4 billion as against an accretion of $31.2 billion.
The current account deficit for the first quarter of this fiscal has been revised downwards to $23.9 billion (2.8% of GDP) due to a downward adjustment in customs data.
Net FDI inflows remained almost flat at $20 billion in the first half as compared to $20.3 billion a year ago.
Portfolio investment recorded a net outflow of $8.1 billion as against an inflow of $4.3 billion in the first half.
In the first six months ended September, the forex reserves (on BoP basis) had decreased by $25.8 billion.