CAD eases marginally to 2.4% of GDP in Apr-Jun quarter of current fiscal, shows RBI data

Mumbai: India’s current account deficit (CAD) as a percentage of GDP declined marginally to 2.4 percent in the April-June quarter of 2018-19 against 2.5 percent in the year-ago period, the RBI data released on Friday showed. In value terms, the CAD was higher at $15.8 billion in April-June this year as against $15 billion in the same quarter of 2017-18 mainly due to a higher trade deficit. “India’s current account deficit (CAD) stood at $15.8 billion (2.4 percent of GDP) in Q1 of 2018-19 as compared with $15 billion (2.5 percent of GDP) in Q1 of 2017-18,” the RBI said on Developments in India’s Balance of Payments (BoP). [caption id=“attachment_4292949” align=“alignleft” width=“380”] Representational image. News18.[/caption] The Indian currency is declining against the US dollar due to global factors as well as concerns on higher trade deficit on account of sustained high crude oil prices. According to the data, net services receipts increased by 2.1 percent year-on-year mainly on the back of a rise in net earnings from software and financial services. “Private transfer receipts, mainly representing remittances by Indians employed overseas, amounted to $18.8 billion, increasing by 16.9 percent from their level a year ago,” the central bank said. The data on BoP also revealed that net foreign direct investment at $9.7 billion in the first quarter of 2018-19 was higher than $7.1 billion in the year-ago period. However, portfolio investment recorded net outflow of $8.1 billion in the first quarter of 2018-19 as compared with an inflow of $12.5 billion in the year-ago period – on account of net sales in both the debt and equity markets, the RBI added. Net receipts on account of non-resident deposits amounted to $3.5 billion in April-June, 2018-19, as compared with $1.2 billion a year ago. There was a depletion of $11.3 billion of the foreign exchange reserves (on BoP basis) in the first quarter as against an accretion of $11.4 billion in the year-ago period.