India’s current account balance logged a surplus in the January-March quarter, largely due to higher service exports and private transfer receipts, the central bank said on Monday.
The current account surplus stood at $5.7 billion, or 0.6 per cent of the GDP, in the fourth quarter of the fiscal year 2023-24, compared with a deficit of $8.7 billion or 1 per cent of the GDP in the preceding quarter, the Reserve Bank of India (RBI) said in a statement.
The deficit stood at $1.3 billion or 0.2 per cent of GDP in the same quarter a year earlier.
For the full fiscal year, the deficit moderated to $23.2 billion, or 0.7 per cent of the GDP, from $67 billion, or 2 per cent of the GDP, last year on the back of a lower merchandise trade deficit.
“Services exports grew by 4.1 per cent on a year-on-year basis in the fiscal fourth quarter on the back of rising exports of software, travel and business services,” the RBI said.
Net services receipts were at $42.7 billion, higher than $39.1 billion recorded a year earlier, contributing to the surplus, the RBI said.
Merchandise trade deficit narrowed to $50.9 billion in the quarter, from $52.6 billion a year earlier, the RBI said.
The merchandise trade deficit in May stood at $23.78 billion compared with $19.1 billion in April.
Private transfer receipts, which are mainly remittances by Indians employed overseas, increased 11.9 per cent on-year to $32 billion.
Going by early trends, India’s current account deficit (CAD) should be “manageable” at 1-1.5 per cent of the GDP in the fiscal year 2024-25 and steady capital inflows should ensure that the balance of payments which reflect the fundamentals “remain comfortable”, said Madan Sabnavis, chief economist at Bank of Baroda.
The country’s balance of payments was at a surplus of $30.8 billion in the March quarter, compared with a surplus of $5.6 billion a year earlier.