- India’s current account deficit(CAD) for the January-March period narrowed to $1.2 billion (0.2 % of GDP) from $18.1 billion (3.6 % of GDP) in the same period last year,was also lower than $4.2 billion (0.9 % of GDP) in October-December 2013-14.
- According to Reserve Bank of India (RBI) the lower CAD was on account of a decline in the trade deficit as decline in imports was sharper than exports.
- As per preliminary data released by RBI on India’s balance of payments(BoP), merchandise exports declined by 1.3 % to $ 83.7 billion for the fourth quarter of 2013 -14,against an increase of 5.9 % in fourth quarter of 2012-13.
- Declining trend in merchandise imports at $114.30 billion by 12.3 % in the fourth quarter 2013-14 led by a steep drop in gold imports, which amounted to $ 5.30 billion, lower than $15.80 billion in the fourth quarter of 2012-13.
- The merchandise trade deficit contracted by about 33 % to $30.70 billion 2013-14 from $ 45.60 billion in the corresponding quarter a year ago.
- BoP during 2013-14 export recovery and moderation in imports led to a drop in the trade deficit to $147.60 billion in 2013-14 from $195.70 billion in 2012-13.
- Contraction in the trade deficit resulted in a reduction of CAD to $32.40 billion (1.7 % of GDP) in 2013-14 from $87.80 billion (4.7 % of GDP) in 2012-13.
- The RBI said:
- The net inflows under the capital and financial account declined to $48.80 billion in 2013-14 from $89 billion in corresponding period of 2012-13 owing to lower net FDI and portfolio flows, net repayment of loans and trade credit and advances.
- On BoP basis, foreign exchange reserves increased by $15.50 billion during 2013-14 as compared with $3.80 billion in 2012-13.
- Read at : http://www.thehindu.com/
todays-paper/tp-business/ current-account-deficit- narrows-to-17-of-gdp/ article6051266.ece
Exams Perspective:
- CAD
- Foreign Exchange
- FDI
- FII
- GDP
- Bullion
- Fiscal Deficit
- Balance of Payments (BoP)
