CAD narrows to 0.2% of GDP in Q4

Mumbai: India’s current account deficit (CAD) narrowed to $1.3 billion or 0.2 per cent 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 $1.3 billion (0.2 per cent of GDP) in Q4:2022-23 from $16.8 billion (2.0 per cent of GDP) in Q3:2022-231, and $13.4 billion (1.6 per cent of GDP) a year ago,” the Reserve Bank said. CAD is a key indicator of the balance of payment (BoP) of a country. 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 $52.6 billion from $71.3 billion in the preceding quarter, coupled with robust services exports.

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.