Trade deficit narrows sequentially
India’s current account balance saw a far lower surplus of $6.5 billion (0.9% of GDP) in the first quarter ended June 30, (Q1FY22) compared with a surplus of $19.1 billion (3.7% of GDP) a year earlier.
The balance of payments registered a $8.1 billion deficit (1% of GDP) in the quarter ended March, Reserve Bank of India data released on Thursday showed.
The surplus in the current account in Q1FY22 compared with the previous quarter was primarily on account of contraction in the trade deficit to $30.7 billion from $41.7 billion in the preceding quarter, and an increase in net services receipts, as per data provided by the(RBI).
Net services receipts increased, both sequentially and on a year-on-year basis, on the back of robust performance of net exports of computer and business services. Private transfer receipts, mainly representing remittances by Indians employed overseas, amounted to $ 20.9 billion, an increase of 14.8% from their level a year earlier.
In the financial account, net foreign direct investment recorded inflow of $11.9 billion compared with an outflow of $0.5 billion.
Net foreign portfolio investment was $ 0.4 billion ($0.6 billion), data showed.
Net external commercial borrowings to India recorded inflow of $0.5 billion (outflow of $0.6 billion). Net inflow on account of non-resident deposits decreased to $2.5 billion ($3 billion).
There was accretion of $31.9 billion to the foreign exchange reserves (on a BoP basis) compared with $19.8 billion a year earlier, the RBI said in a a release.
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