CAD current account deficit declines sharply to 1% of GDP in July-September quarter

India's 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, mainly due to lower merchandise trade deficit and growth in services exports, according to a RBI data released on Tuesday.

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.

"Underlying the lower current account deficit on a year-on-year (y-o-y) basis in Q2:2023-24 was the narrowing of merchandise trade deficit to USD 61.0 billion from USD 78.3 billion in Q2:2022-23," said the data on Developments in India's Balance of Payments during the second quarter (July-September) of 2023-24.

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, the Reserve Bank said. Net services receipts increased both sequentially and on a y-o-y basis, it added.

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