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Journalism of Courage
India’s current account deficit (CAD) narrowed to 0.2 per cent of GDP ($1.3 billion) during the fourth quarter of 2014-15 from 1.6 per cent ($8.3 billion) in the third quarter and a shade higher than $1.2 billion or 0.2 per cent of GDP in the fourth quarter of 2013-14, the Reserve Bank of India has said.
For the full year, CAD tracked the trade deficit and shrank to $27.5 billion in 2014-15 (1.3 per cent of GDP) from $32.4 billion (1.7 per cent) a year ago. “The reduction in the CAD in Q4 FY15 was primarily on account of lower trade deficit as net earnings through services and primary income (profit, dividend & interest) witnessed a decline in Q-o-Q terms albeit secondary income recorded a marginal rise of 0.4 per cent,” the RBI said.
The merchandise trade deficit ($31.7 billion during Q4 FY15) contracted sharply on a Q-o-Q basis on account of a larger decline in merchandise imports (13.4 per cent) than in merchandise exports (10.4 per cent).
However, in terms of Y-o-Y changes, the trade deficit in Q4 FY15 widened marginally as exports registered a larger decline (15.4 per cent), than imports (10.4 per cent). “Gross private transfer receipts, representing remittances by Indians employed overseas amounted to $17.5 billion, witnessing a marginal increase of 0.4 per cent on Q-o-Q basis and an increase of 1.2 per cent from the level a year ago,” the RBI said.
In the financial account, net inflows of foreign direct and portfolio investment were higher on a Q-o-Q basis, though net loans availed by banks witnessed an outflow $3.5 billion mainly on account of increase in balances of foreign currency assets held abroad by banks.
