India posted a current account deficit of 1.2 percent of GDP in 2021-22 versus a surplus of 0.9 percent in FY2020-21 on a larger trade deficit, the Reserve Bank said on Wednesday.
For the January-March 2022 quarter, CAD narrowed to $13.4 billion, or 1.5 percent of GDP, on a sequential basis from $22.2 billion, or 2.6 percent of GDP, in the December 2021 quarter.
A current account deficit occurs when the value of imported goods and services and other payments exceeds the value of a country’s exports of goods and services and other receipts in a given period.
The trade deficit widened to $189.5 billion in FY22 from $102.2 billion a year ago, prompting a decline in the number believed to be key to a country’s external strength, the RBI said .
Balance of payments data suggests that imports of goods were US$618.6 billion in FY22, up from US$398.5 billion in the same period last year, leading to a widening of the trade deficit.
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