India Moves to current account deficit of $9.7 billions Q1 FY25
India’s current account deficit (CAD) widened marginally to $9.7 billion (1.1 per cent of GDP) in Q1 FY2024-25 from $8.9 billion (1.0 per cent of GDP) in Q1 2023-24 and against a surplus of $4.6 billion (0.5 per cent of GDP) in Q4FY2023-24, data released by the Reserve Bank of India stated.
“The widening of CAD on a year-on-year (y-o-y) basis was primarily due to a rise in merchandise trade deficit to $65.1 billion in Q1FY25 from $56.7 billion in Q1 FY24,” it read.
The current account surplus for Q4 FY24 was revised downwards to $4.6 billion from $5.7 billion earlier due to an upward adjustment of customs data on merchandise imports. In the financial account, net foreign direct investment inflows increased to $6.3 billion in Q1 FY25 from $4.7 billion in the corresponding period of 2023-24.
There was an accretion of US$ 5.2 billion to the foreign exchange reserves (on a BoP basis) in Q1:2024-25 as compared with US$ 24.4 billion in Q1 FY24.Net inflows under foreign portfolio investment moderated to $0.9 billion from $15.7 billion in Q1 FY24.
Net inflows under external commercial borrowings (ECBs) to India amounted to $1.8 billion in Q1 FY25, lower than $5.6 billion in the corresponding period a year ago.
