Current account swings to surplus in Q4, may slip again

After three deficit quarters, India reported a current account surplus for January-March, but is expected to slip back into a deficit in the ongoing first financial quarter of 2025-26.

- Shayan Ghosh

The fourth quarter of FY25 saw a current account surplus of 1.3% of gross domestic product, against a deficit of 1.1% for the third quarter, data released by the Reserve Bank of India on Friday showed.

The surplus improved to $13.5 billion in the latest March quarter from a surplus of $4.6 billion in the same period last year. In the December quarter, India recorded a current account deficit of $11.3 billion.

The current account measures the flow of goods, services and investments into and out of the country. A surplus indicates more money entered India than it went out, signaling improved external stability. A deficit would have added pressure on the rupee and inflated costs for businesses.

Economists said a significant jump in services receipts and strong remittances drove the current account surplus in the fourth quarter. While they had estimated a surplus in the current account balance, the extent of it came as a surprise.