Current account deficit rises to 2.8% of GDP in the first quarter of FY23

New Delhi. The country’s current account deficit (Current Account Deficit) increased to $23.9 billion in the first quarter of the financial year 2022-23. This is 2.8% of the Gross Domestic Product (GDP). CAD has increased mainly due to increase in trade deficit. Current Account Deficit is the main indicator showing the status of Balance of Payments.

CAD $13.5 billion in the January-March quarter
According to the Reserve Bank of India’s Balance of Payments data for the first quarter (April-June) of 2022-23, there was a deficit of $23.9 billion on the current account front, which is 2.8 percent of GDP. In the January-March quarter of the last financial year 2021-22, CAD was $13.5 billion, or 1.5 per cent of GDP. According to the data, in the first quarter of 2021-22, the country’s current account surplus was $ 6.6 billion, which is 0.9 percent of GDP.

Reserve Bank of India statement
RBI said, “The reason for the increase in CAD in the first quarter of the current financial year is due to increase in commodity trade deficit and higher net investment income payment. The commodity trade deficit stood at $68.6 billion in the first quarter of 2022-23, as compared to $54.5 billion in the fourth quarter of 2021-22.

Increase in exports of computers and business services
The central bank also said that net services realization increased both on a quarterly and year-on-year basis, driven by an increase in exports of computers and business services.

What is Current Account Deficit
Current account deficit is a measure of a country’s trade where the value of the goods and services it imports exceeds the value of the goods and services it exports.

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Tags: GDP, GDP growth