<p>New Delhi: India’s current account balance recorded a surplus of $5.7 billion in the January-March quarter due to a lower trade deficit and a higher inflow of remittances by Indians employed overseas, the Reserve Bank of India (RBI) data showed on Monday.</p>.<p>As per analysts, this is the first time in ten quarters that India’s balance of payments has turned surplus.</p>.Armed with RBI’s bonanza, government likely planning a ‘feel-good’ budget.<p>For the full financial year 2023-24, the current account deficit declined to $23.2 billion or 0.7 per cent of the country’s gross domestic product (GDP) from $67 billion or 2 per cent of GDP in 2022-23.</p>.<p>Current account deficit (CAD) occurs when the value of a country’s imports of foreign goods, services and international transfers of capital, exceeds the value of exports. The RBI noted in a statement that the current account deficit moderated in 2023-24 “on the back of a lower merchandise trade deficit.”</p>.<p>India’s overall trade deficit (merchandise and services together) declined by 35.77 per cent to $78.12 billion in the year ended March 2024. Foreign portfolio investment increased by $44.1 billion in 2023-24, compared to an outflow of $5.2 billion in the year before.</p>.<p>However, net foreign direct investment (FDI) inflow declined to $9.8 billion in the year ended March 2024 from $28 billion recorded in the previous year.</p>.S&P retains India's FY'25 GDP growth estimate at 6.8%.<p>As per the rating agency ICRA, the current account deficit is likely to remain in the range of 1 to 1.2 per cent of GDP in the current financial year. “A CAD of 1.0-1.2% of GDP in FY2025 would be comfortably financed, particularly given the expectations of large FPI-debt inflows on account of the bond index inclusion starting end-June 2024,” said Aditi Nayar, Chief Economist at ICRA.</p>.<p>Madan Sabnavis, Chief Economist at Bank of Baroda said it is likely to remain in the range of 1 to 1.5% of the GDP on the back of steady capital inflows. “This will also keep the rupee range bound at Rs 83-84/$ with external factors like strength of the dollar guiding the currency,” Sabnavis said. </p>.<p>During the quarter ended March 2024, the current account balance recorded a surplus of 0.6% of GDP against a deficit of 1% of GDP in the previous quarter. Merchandise trade deficit in the quarter narrowed to $50.9 billion from $52.6 billion recorded in Q4FY23.</p>.<p>Services exports grew by 4.1 per cent on a year-on-year basis during the quarter under review on the back of rising exports of software, travel and business services. Net services receipt at $42.7 billion in the January-March quarter was higher than $39.1 billion recorded in the corresponding period of the previous year.</p>.<p>Private transfer receipts, mainly representing remittances by Indians employed overseas, amounted to $32.0 billion in the January-March quarter, an increase of 11.9 per cent over their level a year ago.</p>
<p>New Delhi: India’s current account balance recorded a surplus of $5.7 billion in the January-March quarter due to a lower trade deficit and a higher inflow of remittances by Indians employed overseas, the Reserve Bank of India (RBI) data showed on Monday.</p>.<p>As per analysts, this is the first time in ten quarters that India’s balance of payments has turned surplus.</p>.Armed with RBI’s bonanza, government likely planning a ‘feel-good’ budget.<p>For the full financial year 2023-24, the current account deficit declined to $23.2 billion or 0.7 per cent of the country’s gross domestic product (GDP) from $67 billion or 2 per cent of GDP in 2022-23.</p>.<p>Current account deficit (CAD) occurs when the value of a country’s imports of foreign goods, services and international transfers of capital, exceeds the value of exports. The RBI noted in a statement that the current account deficit moderated in 2023-24 “on the back of a lower merchandise trade deficit.”</p>.<p>India’s overall trade deficit (merchandise and services together) declined by 35.77 per cent to $78.12 billion in the year ended March 2024. Foreign portfolio investment increased by $44.1 billion in 2023-24, compared to an outflow of $5.2 billion in the year before.</p>.<p>However, net foreign direct investment (FDI) inflow declined to $9.8 billion in the year ended March 2024 from $28 billion recorded in the previous year.</p>.S&P retains India's FY'25 GDP growth estimate at 6.8%.<p>As per the rating agency ICRA, the current account deficit is likely to remain in the range of 1 to 1.2 per cent of GDP in the current financial year. “A CAD of 1.0-1.2% of GDP in FY2025 would be comfortably financed, particularly given the expectations of large FPI-debt inflows on account of the bond index inclusion starting end-June 2024,” said Aditi Nayar, Chief Economist at ICRA.</p>.<p>Madan Sabnavis, Chief Economist at Bank of Baroda said it is likely to remain in the range of 1 to 1.5% of the GDP on the back of steady capital inflows. “This will also keep the rupee range bound at Rs 83-84/$ with external factors like strength of the dollar guiding the currency,” Sabnavis said. </p>.<p>During the quarter ended March 2024, the current account balance recorded a surplus of 0.6% of GDP against a deficit of 1% of GDP in the previous quarter. Merchandise trade deficit in the quarter narrowed to $50.9 billion from $52.6 billion recorded in Q4FY23.</p>.<p>Services exports grew by 4.1 per cent on a year-on-year basis during the quarter under review on the back of rising exports of software, travel and business services. Net services receipt at $42.7 billion in the January-March quarter was higher than $39.1 billion recorded in the corresponding period of the previous year.</p>.<p>Private transfer receipts, mainly representing remittances by Indians employed overseas, amounted to $32.0 billion in the January-March quarter, an increase of 11.9 per cent over their level a year ago.</p>