CAD narrows sharply to $0.3 billion in Q4 on lower trade deficit

Zee Media Bureau

New Delhi: India's current account deficit narrowed sharply to USD 0.3 billion or 0.1 percent of GDP in the fourth quarter of FY 2015-16 ended March 31, 2016 from the USD 7.1 billion or 1.3 percent in the third quarter, mainly on account of lower trade deficit.

The Reserve Bank of India data on Thursday showed that the current account deficit also shrunk to 1.1 percent of the GDP in FY2015-16 from 1.8 percent in the previous fiscal.

"CAD narrowed sharply to USD 0.3 billion, or 0.1 percent of GDP, in Q4 FY2015-16, significantly lower than USD 7.1 billion, or 1.3 percent, in Q3 and marginally lower than USD 0.7 billion, or 0.1 percent, in Q4 FY2014-15," the Reserve Bank said today.

Meanwhile, India's trade deficit also narrowed to USD 130.1 billion in the last fiscal compared to the USD 144.9 billion a year ago, the RBI data showed. The overall Balance of Payment (BoP) during the fiscal moderated to USD 17.9 billion from USD 61.06 billion in 2014-15.

On Wednesday, a data released by the government showed exports fell for the 18th month in a row in May, though marginally by 0.79 percent to USD 22.17 billion as several non-oil sectors such as engineering and gems and jewellery saw a rise in outward shipments.