CAD narrows to 0.2% of GDP in Q4 FY23: RBI data

Mumbai:  India's current account deficit (CAD) narrowed to USD 1.3 billion or 0.2 percent of GDP in the January-March quarter of FY23, mainly due to moderation in the trade deficit and a robust increase in services exports, RBI data showed on Tuesday.

India's CAD decreased to USD 1.3 bn in Q4 2022-23

"India's CAD decreased to USD 1.3 billion (0.2 percent of GDP) in Q4:2022-23 from USD 16.8 billion (2 percent of GDP) in Q3:2022-231, and USD 13.4 billion (1.6 percent of GDP) a year ago," the Reserve Bank said.
CAD is a key indicator of the balance of payment of a country.

Sequential decline in CAD was mainly on account of a moderation in trade deficit to USD 52.6 bn

The sequential decline in CAD in the fourth quarter of the last fiscal was mainly on account of a moderation in the trade deficit to USD 52.6 billion from USD 71.3 billion in the preceding quarter, coupled with robust services exports.

Net services receipts increased

Net services receipts increased, sequentially and on a year-on-year (y-o-y) basis, on the back of a rise in net earnings from computer services, the RBI said. There was an accretion to the foreign exchange reserves (on a BoP basis) to the tune of USD 5.6 billion against depletion of USD 16 billion in Q4 2021-22.

Current account balance recorded a deficit of 2% of GDP

For fiscal 2022-23, the current account balance recorded a deficit of 2 percent of GDP compared to a deficit of 1.2 percent in 2021-22, as the trade deficit widened to USD 265.3 billion from USD 189.5 billion a year ago.

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