Key Points
India's current account balance- the difference between country's exports and imports almost halved to a deficit of $9.2 billion in the June quarter from $17.9 billion in the same period a year ago as lower global crude and commodity prices helped narrow the merchandise trade deficit and higher software exports helped in lowering the current account deficit...
In terms of percentage of country's gross domestic product or GDP the country's current account deficit or CAD narrowed to .1 per cent of GDP in the June quarter from 2.1 per cent of GDP period comparable qaurter ending June 2022..
But it was higher than $ 1.3 billion (0.2 per cent of GDP) in the preceding Mrach 2023 quarter, according to the preliminary numbers released by the Reserve Bank of India.. " The current account deficit widened in Q2 on account of a higher goods trade deficit and increase in outbound remittances," said Rahul Bajoria, MD & Head of EM Asia (ex-China) Economics, Barclays..
The widening of CAD on a quarter-on-quarter basis was primarily on account of a higher trade deficit coupled with a lower surplus in net services and a decline in private transfer receipts, the Reserve Bank said in a release..
With the average merchandise trade deficit trending higher in Jul-Aug 2023 relative to June quarter levels and the recent rise in crude oil prices, Ratings firm Icra estimates the CAD to widen sequentially to $19-21 billion or 2.3% of GDP in the September quarter...
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