New Delhi, Jun 28: The country’s current account deficit in the last quarter (January-March) of FY23 registered a significant decline at USD 1.3 billion (Rs 10,400 crore) or 0.2 percent of GDP, from 2 percent of GDP at USD 16.8 billion (Rs 134,400 crore) in the previous (October-December) quarter, the Reserve Bank of India (RBI) data released on Tuesday showed.
As per the central bank, the decline is majorly on account of moderation in trade deficit at USD 52.6 billion (Rs 4,20,800 crore) in Q4FY23 from USD 71.3 billion (Rs 5,70,400 crore) in Q3FY23 along with robust services. Net services increased both sequentially and on a year-on-year basis owing to a surge in net earnings from computer services.
Private transfer receipts, mainly representing remittances by Indians employed overseas, increased to USD 28.6 billion (Rs 2,28,800 crore), up by 20.8 percent from their level a year ago. “Net outgo on the primary income account, largely reflecting net income payments on foreign investment, increased on a year-on-year basis, while showing a marginal decline sequentially,” the release stated. In addition, in the financial account, net foreign direct investment (FDI) at USD 6.4 billion in the latest quarter was higher than USD 2 billion in Q3FY23, though lower than a year ago (USD 13.8 billion) period. Meanwhile, net foreign portfolio investment (FPI) recorded an outflow of USD 1.7 billion, driven by the equity segment, as compared with an outflow of USD 15.2 billion during the corresponding period a year ago.
Net external commercial borrowings (ECBs) to India recorded an inflow of USD 1.7 billion, as against an outflow of USD 2.5 billion during Q3FY23 and an inflow of USD 3.3 billion in Q4FY22. The RBI said there was an accretion to the foreign exchange reserves (on a BoP basis) to the tune of USD 5.6 billion as against a depletion of USD16.0 billion in Q4FY22.
