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Current account deficit widens to 2.4% of GDP in Q1, shows RBI data

LiveMint logoLiveMint 15-09-2017 PTI

Mumbai: The current account deficit (CAD) increased to $14.3 billion, or 2.4% of the gross domestic product (GDP), in the first quarter of the current fiscal, from $0.4 billion a year ago, the Reserve Bank of India (RBI) said.

On a sequential basis, the CAD also widened from $3.4 billion or 0.6% of the GDP in the fourth quarter of fiscal 2017. “The widening of the CAD on a year-on-year basis was primarily on account of a higher trade deficit, which was at $41.2 billion brought about by a larger increase in merchandise imports relative to exports,” the RBI said. Balance of payments for the April-June quarter stood at $11.40 billion from $6.969 billion in the year ago period.

The net foreign direct investment at $7.2 billion in the reporting quarter almost doubled from its level in the same period last year. Net portfolio investment recorded substantial inflow of $12.5 billion in the quarter, primarily in the debt segment, as compared to $2.1 billion in first quarter of last year.

Net services receipts rose by 15.7% on a year-on-year basis, mainly on the back of a rise in net earnings from travel, construction and other business services. Private transfer receipts, mainly representing remittances by Indians employed overseas, at $6.1 billion, increased by 5.3% over the corresponding quarter of previous year.

In April-June quarter, there was an accretion of $11.4 billion to foreign exchange reserves as compared to $7 billion in the year-ago quarter and $7.3 billion in the fourth quarter of fiscal 2017.

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