Mumbai:The Reserve Bank of India (RBI) released data indicating a significant decline in India’s current account deficit (CAD) to 1% of the Gross Domestic Product (GDP) or $8.3 billion in the three months to September. This reduction is attributed to a narrower merchandise trade deficit and the growth of services exports.
In comparison, the CAD was 3.8% of GDP or $30.9 billion during the same quarter in 2022-23. The deficit stood at $9.2 billion or 1.1% of GDP in the first quarter (April-June) of the current financial year 2023-24.
The lower CAD in Q2:2023-24 resulted from a reduced merchandise trade deficit of $61.0 billion, down from $78.3 billion in Q2:2022-23. Services exports experienced a 4.2% year-on-year growth, driven by increased exports of software, business, and travel services.
India’s balance of payments recorded a small surplus of $2.5 billion in the September quarter, compared to a deficit of $30.4 billion a year ago. Despite this surplus, there was a sequential narrowing from $24.4 billion in the June quarter.
The country’s GDP data for July-September 2023-24 indicated a growth of 7.6%, making India the fastest-growing major economy globally. The rise was supported by government spending and robust performance in manufacturing, mining, and construction sectors.
