Cur­rent A/c Deficit Widens

The Economic Times - - Companies & Economy - Press Trust of In­dia

Mum­bai: In­dia’s cur­rent ac­count deficit (CAD) widened to 2.9% of the GDP in the se­cond quar­ter of the fis­cal, com­pared with 1.1% in the year-ago pe­riod, mainly due to a large trade deficit, the RBI said on Fri­day.

The CAD, or the dif­fer­ence be­tween out­flow and in­flow of for­eign ex­change in the coun­try’s cur­rent ac­count, was $19.1 bil­lion dur­ing the quar­ter ended Septem­ber 30, 2018. It in­creased from $6.9 bil­lion or 1.1% of GDP in the se­cond quar­ter of 2017-18. The CAD stood at $15.9 bil­lion (2.4% of GDP) in the April-June quar­ter.

“In­dia’s cur­rent ac­count deficit (CAD) at $19.1 bil­lion (2.9% of GDP) in Q2 of 2018-19 in­creased from $6.9 bil­lion (1.1% of GDP) in Q2 of 2017-18 and $15.9 bil­lion (2.4% of GDP) in the pre­ced­ing quar­ter,” the RBI said.

The CAD has in­creased to 2.7% of GDP in first half of 2018-19 from 1.8% in the cor­re­spond­ing pe­riod of 2017-18 on the back of widen­ing of the trade deficit.

As per the cen­tral bank, the widen­ing of the CAD on a year-onyear ba­sis was pri­mar­ily on ac­count of a higher trade deficit at $50 bil­lion as com­pared to $32.5 bil­lion a year ago.

RBI’s pre­lim­i­nary data on In­dia’s bal­ance of pay­ments (BoP) for July-Septem­ber 2018-19 fur­ther re­vealed that net ser­vices re­ceipts in­creased by 10.2% on a YoY ba­sis, 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 $20.9 bil­lion dur­ing the quar­ter, in­creas­ing by 19.8% from their level a year ago.

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