India’s CAD current account deficit shrinks to 0.2% in Q4FY23 as trade gap narrows: RBI

India’s current account deficit (CAD) narrowed sharply in the January to March quarter, mainly on the back of a moderation in the trade gap and an increase in services exports, the Reserve Bank of India said on Wednesday. CAD narrowed to $1.3 billion or 0.2 per cent in the last quarter of FY23 from $16.8 billion or 2 per cent of GDP in Q3 and $13.4 billion in Q4FY22, showed the recent data released by the Reserve Bank of India (RBI) on Tuesday.

As per various analysts, the shrinking of India's current account deficit was on account of a trade deficit of $ 265.3 billion as against $ 188.5 billion a year ago.

"Net invisible receipts were higher in FY23 due to the increase in net exports of services and net private transfer receipts, even though net income outgo was higher than a year ago," the RBI said.

A Reuters survey of 22 economists showed the current account balance likely recorded a surplus of $3.3 billion, or 0.4 per cent of gross domestic product (GDP) in the March quarter.

Forecasts ranged widely, from a deficit of $5.0 billion to a surplus of $7.8 billion.