India's current account deficit widens to 2.7% in December quarter

India's current account deficit widened to USD 23 billion or 2.7 per cent of the GDP in the December quarter, the Reserve Bank said on Thursday.

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The health of current account, which is a key indicator of a country's external strength, has deteriorated when compared to the preceding September quarter as well as the year-ago period.

The deficit was at USD 9.9 billion or 1.3 per cent of the GDP in the second quarter of this fiscal while the same stood at USD 2.2 billion or 0.3 per cent of the GDP in the year-ago period, the data on Balance of Payments showed.

The widening of the current account deficit for the December quarter was attributed by the central bank to pressures on the trade deficit front, with the gap on that front increasing to USD 60.4 billion due to rising imports.

Net services receipts increased, both sequentially and on a year-on-year (y-o-y) basis, on the back of robust performance of net exports of computer and business services.

For the first nine months of the current fiscal, the current account deficit came at 1.2 per cent of the GDP as against a surplus of 1.7 per cent in the April-December 2020 period, as per the data.