India's Q1 current account deficit narrows to 0.1% of GDP
India’s current account deficit (CAD) narrowed to USD 0.3 billion, or 0.1 percent of GDP, in the first quarter of 2016-17 on account of lower trade gap.
Zee Media Bureau
New Delhi: India’s current account deficit (CAD) narrowed to USD 0.3 billion, or 0.1 percent of GDP, in the first quarter of 2016-17 on account of lower trade gap.
The contraction in CAD in the first quarter of the current fiscal was primarily on account of lower trade deficit, which stood at USD 23.8 billion.
Key Features of CAD data
-The current account deficit (CAD) narrowed to US$ 0.3 billion (0.1 per cent of GDP) in Q1 of 2016-17, significantly lower than USD 6.1 billion (1.2 percent of GDP) in Q1 of 2015-16.
-The contraction in the CAD was primarily on account of a lower trade deficit (USD 23.8 billion) than in Q1 of last year $34.2 billion) and in the preceding quarter ($24.8 billion).
-On a BoP basis, merchandise imports declined sharply (by 11.5 percent) vis-à-vis merchandise exports (which declined by 2.1 percent), leading to a lower trade deficit in Q1 of 2016-17.
-Net services receipts declined on a y-o-y basis, largely due to a fall in net earnings on account of travel, financial services and other business services.
-Net payment on account of primary income (dividend, interest and profit) increased marginally in Q1 of 2016-17 from its level a year ago.
-Private transfer receipts, mainly representing remittances by Indians employed overseas, amounted to US$ 15.2 billion, declining from their level in the preceding quarter as well as from a year ago.
-Net foreign direct investment moderated to $4.1 billion in Q1 of 2016-17 from $10.0 billion in Q1 of 2015-16 and $8.8 billion in the preceding quarter i.e., Q4 of 2015-16.
-On the other hand, portfolio investment, recorded a net inflow of $2.1 billion in Q1 of 2016-17 as against a marginal outflow in the corresponding period of last year and an outflow of $1.5 billion in the preceding quarter, primarily reflecting net inflow in the equity component.
-Accretion to non-resident Indian (NRI) deposits at $1.4 billion moderated in Q1 of 2016-17 from their level in Q1 last year as well as in the preceding quarter.
-Higher repayments under external commercial borrowings led to a net outflow under loans to India in Q1 of 2016-17 as against net borrowings in the same period last year.
-Foreign exchange reserves (on a BoP basis) increased by $ 7.0 billion in Q1 of 2016-17 as compared with an accretion of $ 11.4 billion in Q1 of 2015-16 and $ 3.3 billion in the preceding quarter.