India's current account deficit widens to $8.2 billion

India's current account deficit widens to $8.2 billion

The country’s current account deficit (CAD), or the difference in the value of goods and services exported and imported, widened from $6.2 billion in the first quarter (April-June) to $8.2 billion in the second quarter (July-September). However, on a year-on-year basis, the July-September CAD was lower than $10.9 billion, or 2.2 per cent of GDP.

“The contraction in CAD was primarily on account of lower trade deficit in second quarter compared with the same time last year,” RBI said in the second quarterly balance of payments data release.

“Although net services receipts moderated marginally on an annual basis, largely due to fall in export receipts in transport, insurance and pension services, there has been some improvement over the preceding quarter,” it said.

The Balance of Payments was in negative territory as there was small drawdown of $0.9 billion from reserves in the September quarter. In contrast, there was accretion of $6.9 billion in July-September 2014. The FM had said CAD is expected to be 1.2 per cent of the GDP for the entire FY 2016. “With a moderately good GDP growth, the fiscal deficit under control, the CAD which we planned to about 1.2 per cent, we intend to achieve that,” he had said.

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