In a recent financial update, the Reserve Bank of India (RBI) has reported a significant contraction in India’s current account deficit (CAD) for the first quarter of the fiscal year 2023-24.
The CAD, which is a key indicator of a country’s economic health, has fallen to US$ 9.2 billion or 1.1% of the GDP in Q1:2023-24. This marks a considerable decrease from the US$ 17.9 billion or 2.1% of GDP observed in Q1:2022-23. However, it is important to note that this figure is higher than the US$ 1.3 billion or 0.2% of GDP seen in the previous quarter.
The RBI has attributed this quarter-on-quarter increase in CAD to a rise in the trade deficit, coupled with a lower surplus in net services and a decrease in private transfer receipts.
On the investment front, net foreign direct investment into India has dipped to US$ 5.1 billion, down from US$ 13.4 billion in the same period last year. In contrast, net foreign portfolio investments have seen inflows of US$ 15.7 billion, reversing from net outflows of US$ 14.6 billion a year ago.
These statistics underscore the fluidity and resilience of India’s economy amidst global economic fluctuations. For more comprehensive information, please refer to the official RBI report.