Current account deficit in India increased in the April-June quarter: RBI

The current account deficit in India increased in the April-June quarter compared to the previous three months, owing mostly to a greater trade deficit, a lower surplus in net services, and a reduction in private transfer receipts, according to the central bank on Thursday.

In the first quarter of fiscal 2023/24, the current account deficit increased to $9.2 billion, or 1.1% of GDP, from $1.3 billion, or 0.2% of GDP, in the previous quarter.

According to the Reserve Bank of India, the deficit in the first quarter of last year was $17.9 billion, or 2.1% of GDP.

In a Reuters poll of 17 economists, the median forecasting for the latest first quarter was $8.9 billion, or 1% of GDP.

The merchandise trade deficit increased to $56.6 billion in the third quarter, up from $52.6 billion in the previous quarter, but was smaller than the $63.1 billion deficit in the previous year. 

Net service receipts fell sequentially as well, owing mostly to a drop in travel, business services, and computer exports, according to the RBI.

Private transfer receipts, primarily remittances from Indians working abroad, fell to $27.1 billion from $28.6 billion.

According to Reuters calculations based on government data released earlier this month, India's trade in merchandise deficit increased more than expected to $24.16 billion in August.

Meanwhile, the country's balance of payments had a $24.4 billion surplus in the first quarter, up from a $5.6 billion surplus the previous quarter and a $4.6 billion surplus the year before, according to the RBI.