Current account deficit increases to 2.4% of GDP in first quarter: RBI

 

Current account deficit (CAD) of the first quarter of this fiscal widened to 2.4 per cent of gross domestic product, or 14.3 billion dollars, as imports pushed the trade deficit. It was 0.1 per cent or 401 million dollars in the same period last year. On a sequential basis, the CAD also widened from 3.4 billion dollars or 0.6 per cent of GDP in the fourth quarter of last fiscal. It is now at its highest level since the June quarter of 2013.

The widening of the year-on-year deficit was primarily on account of a higher trade deficit, which was at 41.2 billion dollars, brought about by a larger increase in merchandise imports relative to exports. However, Balance of payments for the April-June quarter increased to 11.40 billion dollars from 6.969 billion dollars in the year ago period and net foreign direct investment in the reporting quarter almost doubled from its level at 7.2 billion dollars in the same period last year. In April-June quarter, there was growth of 11.4 billion dollars to the foreign exchange reserves as compared to 7 billion dollars in the year-ago quarter and 7.3 billion dollars in the preceding quarter.