Home > News > India > India's current account deficit shrinks sharply in final 2019 quarter
India's monthly trade deficit widened to $15.17 bn in Jan compared with $14.73 bn a year earlier (Photo: Mint)
India's monthly trade deficit widened to $15.17 bn in Jan compared with $14.73 bn a year earlier (Photo: Mint)

India's current account deficit shrinks sharply in final 2019 quarter

  • The CAD also declined to 0.2% of GDP in the third quarter of the fiscal year ending this month from 2.7% in the year-ago period
  • Balance of payments stood at a surplus of $21.6 billion in Q3 of 2019/20 compared with a deficit of $4.3 billion a year ago, data showed

MUMBAI : India's current account deficit (CAD) narrowed further in the final quarter of 2019 on the back of a contraction in the trade deficit and rise in net services receipts, the central bank said on Thursday.

The CAD also declined to 0.2% of gross domestic product in the third quarter of the fiscal year ending this month from 2.7% in the year-ago period. On a quarterly basis, it shrank from 0.9% of GDP in Q2.

The deficit measures the difference between the value of a country's imported and exported goods and services.

"The contraction in the CAD (in 2019 Q4) was primarily on account of a lower trade deficit at $34.6 billion and a rise in net services receipts at $21.9 billion," the Reserve Bank of India (RBI) said in a statement.

India's monthly trade deficit however widened to $15.17 billion in January compared with $14.73 billion a year earlier, and sharply higher versus the deficit of $11.25 billion in December, trade ministry data last month showed.

Data last month showed annual economic growth slowed to a a more-than-six-year low of 4.7% in the December quarter.

The current account deficit stood at $1.4 billion in the last quarter of 2019 versus $17.7 billion a year ago. The merchandise trade deficit narrowed to $34.6 billion from $49.3 billion, the central bank said.

Balance of payments stood at a surplus of $21.6 billion in Q3 of 2019/20 compared with a deficit of $4.3 billion a year ago, data showed. However, the surplus ballooned from $5.1 billion seen in Q2.

Foreign portfolio investment recorded net inflow of $7.8 billion in Q3 of 2019/20 - as against an outflow of $2.1 billion in the same quarter last year – on account of net purchases in both the debt and equity market, the RBI said.

Subscribe to newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.

Click here to read the Mint ePaper Livemint.com is now on Telegram. Join Livemint channel in your Telegram and stay updated

Close
×
My Reads Logout