According to RBI India’s current account deficit widens to 2.8% of GDP in Q1 FY23

India's current account deficit widened to 2.8% of the gross domestic product at $23.9 billion in the first quarter of this fiscal, primarily due to a higher trade deficit. It was $13.4 billion (1.5% of the GDP) in the fourth quarter (January-March) of the last fiscal, according to data released by the Reserve Bank of India.

The current account surplus stood at $6.6 billion (0.9% of the GDP) in the first quarter of the last fiscal.

''Underlying the current account deficit in Q1:2022-23 was the widening of the merchandise trade deficit to $68.6 billion from $54.5 billion in Q4:2021-22 and an increase in net outgo of investment income payments,'' the RBI said.

Net services receipts rose, both sequentially and on a year-on-year basis, it said.

At the end of June, India’s external debt was $617.1 billion, a decrease of $2.5 billion over its level at the end of March this year. The external debt to GDP ratio declined to 19.4% at the end of June from 19.9% at the end of March.

At the end of June, long-term debt was $487.3 billion, recording a fall of $10.6 billion over its level at the end of March.

Loans remained the largest component of external debt, with a share of 31.1%, followed by currency and deposits (22.3%), trade credit and advances (20.6%) and debt securities (18.0%), RBI added.