India’s current account balance recorded a deficit of $23.9 billion (2.8 per cent of GDP) in the first quarter of 2022-23, up from $13.4 billion (1.5 per cent of GDP) in the fourth quarter of 2021-221 and a surplus of $6.6 billion a year ago.

“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,” RBI said

Net services receipts increased, both sequentially and on a year-on-year (y-o-y) basis, on the back of rising exports of computer and business services. Services exports grew y-o-y by 35.4 per cent, led by broad-based growth in computer, business, transportation, and travel services.

Private transfer receipts, mainly representing remittances by Indians employed overseas, amounted to $ 25.6 billion, an increase of 22.6 per cent from a year ago.

External debt declines

At the end of June 2022, India’s external debt was placed at $ 617.1 billion, recording a decrease of $ 2.5 billion over its level at end-March 2022.

The external debt to GDP ratio declined to 19.4 per cent at end of June 2022 from 19.9 per cent at end-March 2022

Valuation gains due to the appreciation of the US dollar vis-à-vis Indian rupee and major currencies such as yen, SDR2, and euro were placed at $14.4 billion. Excluding the valuation effect, external debt would have increased by $ 11.9 billion instead of a decrease of $ 2.5 billion at end-June 2022 over end-March 2022.

Forex reserves decline

Foreign exchange reserves in nominal terms (including valuation effects) decreased by $ 18.2 billion during April-June 2022 as against an increase of $ 34.1 billion in the corresponding period of the preceding year. The valuation loss, reflecting the appreciation of the US dollar against major currencies, amounted to $ 22.7 billion during April-June 2022 as against a valuation gain of $ 2.2 billion during April-June 2021.

social-fb COMMENT NOW