Underlying the lower current account deficit on a year-on-year (YoY) basis in Q2 FY24 was the narrowing of merchandise trade deficit to $61 billion from $78.3 billion in Q2 FY23, a release from the Reserve Bank of India (RBI) said.
Net outgo on the primary income account, primarily reflecting payments of investment income, increased to $12.2 billion during the quarter from $ 11.8 billion a year ago.
India’s current account balance saw a deficit of $8.3 billion, or 1 per cent of the GDP, in the second quarter (Q1) of fiscal 2023-24 (FY24), lower than $9.2 billion (1.1 per cent of the GDP) in Q1 and $30.9 billion (3.8 per cent of the GDP) in Q2 FY23.
The merchandise trade deficit narrowed to $61 billion during the quarter from $78.3 billion in Q2 FY23.
Private transfer receipts, mainly representing remittances by Indians employed overseas, amounted to $28.1 billion, an increase of 2.6 per cent YoY.
In the financial account, net foreign direct investment witnessed an outflow of $0.3 billion during the quarter compared to an inflow of $6.2 billion in Q2 FY23.
Foreign portfolio investment recorded net inflow of $4.9 billion, lower than $6.5 billion during Q2 FY23.
External commercial borrowings to India recorded net outflow of $1.8 billion in Q2 FY24 compared with $0.5 billion in Q2 FY23.
The country’s current account deficit moderated to 1 per cent of the GDP in the first half (H1) of this fiscal from 2.9 per cent of the GDP in H1 FY23 on the back of a lower merchandise trade deficit. Net invisibles receipts were higher in H1 FY24 on a YoY basis.
Net FDI inflow at $4.8 billion in H1 FY24 was lower than $19.6 billion in H1 FY23.
Fibre2Fashion News Desk (DS)
