According to data released by the Reserve, India recorded a current account deficit (CAD) of 1.2% of GDP in 2021-22 against a surplus of 0.9% in 2020-21, as the trade deficit widened to 189.5 billion dollars from $102.2 billion a year ago. Billion dollars done. Bank of India (RBI) on Wednesday.
“The current account balance recorded a deficit of 1.2% of GDP in 2021-22, as against a surplus of 0.9% in 2020-21, as the trade deficit stood at $102.2 billion a year ago,” RBI said in a release. increased to $189.5 billion.” ,
Net invisible receipts were higher in 2021-22 due to an increase in net exports of services and net private transfer receipts, although net income expenditure was higher than a year ago.
Net foreign direct investment (FDI) stood at $38.6 billion in 2021-22, down from $44 billion in 2020-21. Net foreign portfolio investment (FPI) recorded an outflow of $16.8 billion in 2021-22, as against $36.1 billion a year ago.
For the January-March 2022 quarter, the CAD decreased by $13.4 billion, or 1.5% of GDP, on a sequential basis, against $22.2 billion or 2.6% of GDP in the December 2021 quarter.
“The current account deficit is well below our $16 billion estimate for the fourth quarter of FY22, taking advantage of higher-than-expected secondary income,” said Aditi Nair, chief economist at rating agency ICRA.
“On a year-on-year basis, although gold imports halved, and the services trade surplus increased, this improvement was dwarfed by the widening of the trade trade deficit due to imports of commodity inputs such as crude oil, coal and fertilisers. As well as electronic goods,” said Ms. Nair.
The merchandise trade deficit narrowed to $54.5 billion in the March quarter, from $60.4 billion in the previous quarter. However, the loss in the same quarter a year ago was $41.7 billion.
As per the data, net external commercial borrowing in India registered an inflow of $7.4 billion in 2021-22 as compared to $0.2 billion in 2020-21. RBI data shows that in 2021-22, there was an increase of $47.5 billion in foreign exchange reserves on a balance of payments (BoP) basis.
According to preliminary data on India’s BoP for the fourth quarter (January to March), the current account deficit (CAD) narrowed from $22.2 billion (2.6% of GDP) in Q3 to $13.4 billion (1.5% of GDP) in Q4 2021-22. Done: 2021-22. “The gradual decline in CAD in Q4 2021-22 was mainly on account of reduction in trade deficit and lower net expenditure of primary income,” RBI said.
Net services receipts increased sequentially and on a year-on-year (y-o-y) basis, driven by an increase in net income from computer and business services. Private transfer receipts, mainly representing remittances by Indians working abroad, rose 13.4 per cent to $23.7 billion from a year ago level.
Net expenditure from the primary income account, which largely reflects net income payments on foreign investments, declined sequentially as well as on a year-on-year basis. In the financial account, net foreign direct investment (FDI) stood at $13.8 billion, up from $2.7 billion in Q4 2020-21.
Outflows of $15.2 billion were recorded in net foreign portfolio investment – primarily from the equity market. Net ECB in India stood at $3.3 billion in the fourth quarter of 2021-22, as against $6.1 billion a year ago.
As per the data, there was a decline of $16 billion in foreign exchange reserves (on BoP basis) as against an increase of $3.4 billion in Q4 2020-21.
(With inputs from PTI, Reuters)