Current account deficit widens to nine-year high on back of greater trade deficit
The Hindu
‘For the first half ended September, India recorded CAD of 3.3% of GDP, again on the back of a sharp increase in the merchandise trade deficit, compared with 0.2% a year earlier’
India’s current account balance recorded a deficit of $36.4 billion (or a nine-year high of 4.4% of GDP) in the quarter ended September, rising from $18.2 billion (2.2% of GDP) in the previous quarter. Deficit for the year-earlier period came in at $9.7 billion (1.3% of GDP), according to data released by the Reserve Bank of India (RBI) on Thursday.
Underlying the current account deficit in Q2 was the widening of the merchandise trade deficit to $83.5 billion from $63.0 billion in the April-June quarter and an increase in net outgo under investment income, the RBi said.
During the first half-year ended September, India recorded a current account deficit of 3.3% of GDP, again on the back of a sharp increase in the merchandise trade deficit, compared with 0.2% a year earlier.
Net invisible receipts were higher in the first half this year on a year-on-year (y-o-y) basis on account of higher net receipts of services and private transfers.
Services exports during the second quarter grew 30.2% y-o-y on the back of rising exports of software, business and travel services. Net services receipts increased both sequentially and on a y-o-y basis.
Net outgo from the primary income account, mainly reflecting payments of investment income in Q2 increased to $12 billion from $9.8 billion a year earlier.
Private transfer receipts, mainly representing remittances by Indians employed overseas, .
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