CAD inches up to 2.1% at $57.2 bn in FY19, but more than halves in Q4; net services receipts increase 5.8% to $21.3 bn

Overall trade performance was the prime influencer for both the contraction in CAD for the March quarter as well as a widening for the full year.

Press Trust of India June 28, 2019 18:55:32 IST
CAD inches up to 2.1% at $57.2 bn in FY19, but more than halves in Q4; net services receipts increase 5.8% to $21.3 bn
  • For FY19, the deficit widened despite a narrowing of the same in the March quarter to 0.7% of the GDP

  • A lower trade deficit of $35.2 billion in the March quarter helped in CAD contraction

  • The net FDI stood at $6.4 billion in March quarter, the same level as the year-ago period

Mumbai: Current account deficit (CAD) increased to $57.2 billion or 2.1 percent of GDP in FY19 as against 1.8 percent in the previous year, the Reserve Bank of India (RBI) said on Friday.

The CAD, which is the net of foreign exchange inflows and outflows, had stood at $48.7 billion in FY18.

For FY19, the deficit widened despite a narrowing of the same in the March quarter to 0.7 percent of the Gross Domestic Product (GDP) or $4.6 billion, as against $27.7 billion or 2.7 percent in the December quarter and $13 billion or 1.8 percent in the March 2018 quarter, the central bank data showed.

Overall trade performance was the prime influencer for both the contraction in CAD for the March quarter as well as a
widening for the full year.

A lower trade deficit of $35.2 billion in the March quarter, as compared to $41.6 billion in the year-ago period helped in CAD contraction, it said.

CAD inches up to 21 at 572 bn in FY19 but more than halves in Q4 net services receipts increase 58 to 213 bn

Representational image. News 18.

Similarly, an increase in the trade deficit to $180.3 billion for the year as a whole as against $160 billion in the year-ago period led to the widening of the CAD in FY19, the central bank said.

Net services receipts increased 5.8 percent to $21.3 billion on the back of a rise in net earnings from telecommunications, computer and information services during the March quarter.

Private transfer receipts, representing mainly the remittances by expat Indians, declined by 0.9 percent to $17.9 billion in the March quarter, it said.

It can be noted that inflows from the diaspora have been increasing for many years now, making the country the biggest beneficiary of remittances globally.

The net foreign direct investment (FDI) stood at $6.4 billion in March quarter, the same level as the year-ago period, and rose marginally to $30.7 billion for the year as a whole.

Foreign portfolio investment recorded net inflow of $9.4 billion in March quarter versus $2.3 billion in the year-ago period on account of net purchases in both debt and equity markets, the RBI said.

However, for the entire year as a whole, net FPI flows dipped sharply to $2.4 billion as against $22.1 billion in the year-ago period.

The net inflows on account of external commercial borrowings jumped to $7.2 billion in the March quarter from $1 billion a year ago.

From a forex reserves perspective, there was a $3.3 billion depletion during the year, the central bank said.

Updated Date:

Find latest and upcoming tech gadgets online on Tech2 Gadgets. Get technology news, gadgets reviews & ratings. Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison.

also read

With 3.2% expansion in Q1, China becomes first major economy to return to growth since beginning of pandemic
World

With 3.2% expansion in Q1, China becomes first major economy to return to growth since beginning of pandemic

Chinese exporters have benefited from the economy’s relatively early reopening and global demand for medical supplies, according to a National Bureau of Statistics report

Indian economy may contract by 10.3% in 2020, to bounce back with 8.8% growth in 2021, says IMF
Business

Indian economy may contract by 10.3% in 2020, to bounce back with 8.8% growth in 2021, says IMF

Revisions to the growth forecast are particularly large for India, where GDP contracted much more severely than expected in the second quarter

'Solid achievement of BJP's hate-filled cultural nationalism': Rahul Gandhi slams Centre over IMF data
Politics

'Solid achievement of BJP's hate-filled cultural nationalism': Rahul Gandhi slams Centre over IMF data

Rahul shared a graph which showed Bangladesh closing in on India and almost catching up with it in terms of per capita GDP this year