MUMBAI- India’s current account deficit widened in the April-June quarter, from the previous three months, largely due to a higher trade deficit, lower surplus in net services and a drop in private transfer receipts, the central bank said on Thursday.
The current account deficit widened to $9.2 billion, or 1.1 percent of GDP, in the first quarter of fiscal 2023/24, from $1.3 billion, or 0.2 percent of GDP, in the January-March quarter.
The deficit was $17.9 billion, or 2.1 percent of GDP, in the first quarter a year ago, the Reserve Bank of India’s release showed.
The median forecast in a Reuters poll of 17 economists was for a deficit of $8.9 billion, or 1 percent of GDP, for the latest first quarter.
Merchandise trade deficit widened to $56.6 billion in the quarter, from $52.6 billion in the preceding quarter, but was less than the year-ago deficit of $63.1 billion.
Net services receipts also decreased sequentially, mainly due to a decline in travel, business services and the exports of computers, the RBI said.
Private transfer receipts, which are is mainly remittances by Indians employed overseas, moderated to $27.1 billion from $28.6 billion.
The July-September quarter will see a “substantial widening” of the deficit due to the trade balance worsening sequentially, oil and higher core imports rising, and services exports slowing further, said Madhavi Arora, lead economist at Emkay Global Financial Services.
