India’s current account deficit widens to $9.2 billion QoQ in June quarter

New Delhi, Sep 28 (UNI) India’s current account deficit (CAD) widened to $9.2 billion or 1.1% of GDP in April-June quarter of the current fiscal (Q1 FY24) from $1.3 billion (0.2% of GDP) in the preceding quarter (Q4 FY23), according to data released by Reserve Bank of India (RBI) on Thursday.

The CAD, however, narrowed in Q1 as compared to the same period last year when it stood at $17.9 billion or 2.1% of GDP.

“The widening of CAD on a quarter-on-quarter (QoQ) basis was primarily on account of a higher trade deficit coupled with a lower surplus in net services and decline in private transfer receipts,” RBI said in a press release.

The central bank noted that net services receipts decreased sequentially, primarily due to a decline in exports of computer, travel and business services, though remained higher on a year-on-year (y-o-y) basis.

“With the average merchandise trade deficit trending higher in July-August 2023 relative to Q1 FY2024 levels, and the recent rise in crude oil prices, ICRA estimates the CAD to widen sequentially to $19-21 billion (-2.3% of GDP) in Q2 FY2024,” ICRA Chief Economist Aditi Nayar said.

Overall, ICRA has projected the CAD to widen to $73-75 billion in FY24 from $67 billion in FY2023, building in an average crude oil price of $90 a barrel in the second half of the current financial year.

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