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Updated December 27th, 2023 at 11:44 IST

India's CAD sees sharp decline to 1% of GDP in Q3

India's BoP has remained in surplus during Q2 FY24.

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CAD declines sharply to 1 pc of GDP in Jul-Sep quarter | Image:Unsplash
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The current account deficit declined sharply to 1 per cent of the GDP or USD 8.3 billion in the second quarter of this financial year. It narrowed more than expected in the July-September quarter largely due to a lower merchandise trade deficit while services exports also grew, according to a RBI data released on Tuesday. CAD stood at $8.3 billion, or 1 per cent of GDP, in the second quarter of fiscal 2023/24 compared with $9.2 billion or 1.1 per cent of GDP in the preceding quarter.

The current account deficit (CAD) was 3.8 per cent of GDP or USD 30.9 billion in July-September quarter in 2022-23. CAD was USD 9.2 billion or 1.1 per cent of GDP in the first quarter (April-June) of the current financial year 2023-24. Merchandise trade deficit narrowed to $61 billion in the quarter, from $78.3 billion in the year-ago quarter. "Services exports grew by 4.2 per cent on a Y-o-Y basis on the back of rising exports of software, business and travel services. Net services receipts increased both sequentially and on a Y-o-Y basis," the central bank said. Country's merchandise trade deficit narrowed sharply to $20.58 billion in November from the previous month's record levels as imports of gold, petroleum and electronic goods moderated, latest data showed.

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Private transfer receipts, which are mainly remittances by Indians employed overseas, rose 2.6 per cent to $28.1 billion on year. The country's balance of payments recorded a small surplus of $2.5 billion in the September quarter, compared with a deficit $30.4 billion a year ago. The surplus, however, narrowed sharply on a sequential basis from $24.4 billion in the June quarter. 

(With Reuters inputs) 

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Published December 26th, 2023 at 18:19 IST

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