India’s current account deficit narrowed sharply in the January-March 2023 quarter, RBI data showed on Tuesday, attributable to a moderation in the trade deficit and robust services exports.
India’s CAD decreased to USD 1.3 billion (0.2 per cent of GDP) during the quarter from USD 16.8 billion (2.0 per cent of GDP) in the October-December quarter and USD 13.4 billion (1.6 per cent of GDP) a year ago January-March 2022. The trade deficit moderated to USD 52.6 billion in October-December 2022-23 from USD 71.3 billion in October-December 2022-23.
For the entire year 2022-23, the country’s current account recorded a deficit of 2.0 per cent as compared with a deficit of 1.2 per cent in 2021-22 as the trade deficit widened to USD 265.3 billion from USD 189.5 billion a year ago.
A current account deficit is when a country’s total value of imports exceeds the total value of exports. The CAD numbers are a key indicator for any economy.