The Reserve Bank of India (RBI) released a statement on Tuesday, indicating a noteworthy development in India’s economic landscape. According to the RBI, India’s current account deficit (CAD) has experienced a significant decline, amounting to USD 10.5 billion or 1.2 percent of the Gross Domestic Product (GDP) during the October-December quarter. This represents a notable reduction from the CAD figures of USD 11.4 billion recorded in the previous three months and USD 16.8 billion reported during the corresponding period a year ago.
The decline in the current account deficit is indicative of several underlying factors at play within the Indian economy. It suggests a favorable balance between the country’s exports and imports, as well as prudent management of foreign exchange reserves. Furthermore, the decrease in CAD reflects improved economic stability and resilience, which is crucial for sustaining long-term growth and mitigating external vulnerabilities.
This latest data from the RBI underscores the ongoing efforts by policymakers to foster a conducive environment for economic recovery and sustainable development. It also serves as a positive indicator of India’s economic resilience amidst global uncertainties and challenges. As the country continues its journey towards economic recovery, monitoring and managing the current account deficit will remain a key priority for policymakers to ensure macroeconomic stability and sustained growth trajectory.
The Reserve Bank of India (RBI) has revealed that the net Foreign Direct Investment (FDI) inflow during the period of April-December 2023 stood at USD 8.5 billion. This figure represents a notable decline from the corresponding period in the previous year, which recorded a net FDI inflow of USD 21.6 billion during April-December 2022.
Furthermore, the Reserve Bank of India (RBI) reported that the accretion of foreign exchange reserves, based on Balance of Payments (BoP), amounted to USD 6.0 billion during the October-December period, marking a decrease from the accretion of USD 11.1 billion observed in the same period the previous year.
In addition, the merchandise trade deficit stood at USD 71.6 billion during the third quarter of the current financial year, slightly surpassing the deficit of USD 71.3 billion recorded in the corresponding quarter of 2022-23.
Despite these challenges, there was a positive growth in services exports, registering a 5.2% increase on a year-on-year basis. This growth was primarily driven by the expansion of exports in software, business, and travel services. The net services receipts also demonstrated growth both sequentially and compared to the previous year, which helped mitigate the impact of the current account deficit.