India’s current account balance recorded a deficit of $36.4 billion (a nine-year high of 4.4% of GDP) in the quarter ended September, from $18.2 billion (2.2% of GDP) in the previous quarter. The deficit for the previous year period stood at $9.7 billion (1.3 percent of GDP), according to data released by the Reserve Bank of India (RBI) on Thursday.
The current account deficit in the second quarter was explained by the widening of the merchandise trade deficit to $83.5 billion, from $63.0 billion in the April-June quarter, and an increase in net expenditure on investment income, the RBi said.
In the first half to September, India recorded a current account deficit of 3.3% of GDP, again due to a sharp increase in the merchandise trade deficit, from 0.2% a year earlier. early.
Net invisible receipts were higher in the first half of this year on an annual basis (year-on-year) due to higher net receipts from services and private transfers.
Services exports in the second quarter rose 30.2% year-on-year on the back of higher exports of software, business services and travel. Net services revenue increased both sequentially and on an annual basis.
Net outflows from the primary income account, mostly reflecting remittances of investment income in the second quarter, rose to $12 billion from $9.8 billion a year earlier.
Private transfer receipts, representing mainly remittances from Indians employed abroad, .
In the financial account, net foreign direct investment fell from $8.7 billion to $6.4 billion.
Net foreign portfolio investment in the second quarter recorded higher inflows of $6.5 billion, compared with $3.9 billion a year earlier.
India’s net foreign commercial borrowing recorded an outflow of $0.4 billion against an inflow of $4.3 billion.
Nonresident deposits in the second quarter recorded net inflows of $2.5 billion compared with net outflows of $0.8 billion a year earlier, the data showed.
There was a depletion of foreign exchange reserves (on a balance of payments basis) of $30.4 billion against an increase of $31.2 billion.
The current account deficit for the first quarter of this financial year was revised down by $23.9 billion (2.8% of GDP) due to a downward adjustment in customs data, the RBI said. .
Net FDI inflows remained almost stable at 20 billion dollars in the first half, against 20.3 billion dollars a year earlier.
Portfolio investment recorded a net outflow of $8.1 billion in the first half against an inflow of $4.3 billion.
In the first six months to September, foreign exchange reserves were depleted by $25.8 billion (on a BoP basis).