BackIndia's balance of payments shows substantial drop in current account deficit in Q1:2023-24
India's current account deficit (CAD) decreases to $9.2 billion in Q1:2023–2024 from $17.9 billion in Q1:2022–2023, according to RBI data.
PremiumThe Reserve Bank of India (RBI) today released preliminary data on India's Balance of Payments (BoP) for the first quarter (Q1) of the fiscal year 2023–24, which spans out from April and June. The data reveals significant shifts and trends in India's economic standing on the international stage.
India's current account deficit (CAD) in India dropped from US$ 17.9 billion (2.1%) in Q1:2022-23 to US$ 9.2 billion (1.1% of GDP) in Q1:2023–24, according to a release from the RBI today, but it was still greater than US$ 1.3 billion (0.2% of GDP) in the preceding quarter.
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On a quarter-over-quarter basis, the CAD widened primarily as a result of an increase in the trade deficit, a decrease in the net services surplus, and a reduction in private transfer receipts, said RBI in its release.
Although net services receipts fell sequentially, they were nevertheless higher year over year (y-o-y) principally as a result of a reduction in exports of computer, travel, and business services.
Private transfer receipts, which primarily represent remittances from Indians working abroad, decreased to US$ 27.1 billion in Q1:2023–2024 from US$ 28.6 billion in Q4:2022-23, but saw an increase year over year.
Net outgo on the income account, which mostly reflects payments of investment income, decreased to US$ 10.6 billion in Q1:2023–2024 from US$ 12.6 billion in Q4:2022-23, while it was greater than a year earlier, according to RBI's release.
Net foreign direct investment dropped from US$ 13.4 billion a year earlier to US$ 5.1 billion in the financial account. In Q1:2022-23, net foreign portfolio investment saw inflows of $15.7 billion compared to net outflows of $14.6 billion, as per RBI release.
As opposed to an outflow of US$ 2.9 billion the previous quarter, India's net external commercial borrowings saw an inflow of US$ 5.6 billion in Q1:2023–24.
Compared to Q1:2022-23, non-resident deposits saw net inflows of US$ 2.2 billion, up from US$ 0.3 billion.
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